U.S. Dollars Lose Momentum Ahead of the Retail Sales Release, Supply Chain Disruption a Big Constrain.

Retail sales is an economic indicator in USA that keeps inventory of demand for finished goods, by measuring the purchases of durable and non-durable goods over a defined period of time. It is the primary gauge of consumer spending, which accounts for the majority of the overall economic activities.

The US retail sales released last month shows a positive rapid sales increase by 0.7% driven by a surge in online purchases. In the growth trajectory, the sales figure rebounded from the previous low of -1.8% before gaining a strong footing.

In the progression, the month of October is riding on the same lane as back-to-school shopping is likely boosting sales. This will likely offset the projection for a sharp slow in economic recovery in the fourth quarter.

Unfortunately, the automobile sector is currently hit hard by sell shortage driven by Inventory shortage. Due to this, Economic analysts have estimated its gross domestic product to drop low in this quarter. Resurgence in Covid-19 infections fueled by the Delta Variant coronavirus played a role. Blue chip technology sectors are not left out in the retail sales decline as they are constrained by microchip supply shortage leading to supply chain disruption.

In the hospitality industry, retail sales curve flattened due to virus infections and declining flow of traffic to restaurants and bars.

However, according to Chris Low, chief economist at FHN Financial in New York, the “U.S. consumption is not slowing as quickly as it appeared in the first and second quarter despite the fading stimulus”. Consumer Price Index grew 0.4% from the 0.3% previous and the Gross Domestic Product (real GDP) grew at an annual rate of 6.7 percent according to statistics. The ISM Manufacturing Purchasing Manager’s Index in the United States increased 61.1 lately in the fourth quarter, up for a second straight month above the market forecast of 56.6.

Currently, spending is shifting back from goods to retail services like travel and entertainment, healthcare, education, hotel and accommodation. The retail sales market forecast is -0.2% while the core retail sales (excluding the automobiles) forecast is 0.5%.

Increase in retail sales will result in US dollar Index strength

Decrease in Retail sales will result in US dollar Index decline.

Increase volatility is anticipated, and traders should always be aware that volatile markets provide great opportunities for making profits, as the increase can cause market swings for traders to capitalize on.

In response to the news release, trade the forex market with the following trading instruments on ACT Brokers platform, as the pairs are mostly affected by the data release; EURUSD, GBPUSD, XAUUSD, USDJPY, USDCAD, USDCHF, AUDUSD, NZDUSD, US30, US100, USOIL etc.

Time Schedule for next Retail Sales release:

Date: Friday, 15th October, 2021.

Time: 1:30 pm (GMT + 1)

Author:
Amogo Solomon is a Forex Dealer / Global market analyst and writer in ACT Brokers with a background in Computer Science, Data Analytics and Forex Dealing. He specializes in Forex Dealing, Global market strategies, Forex fundamental and technical analysis, and Monitoring of Forex trends, Stocks, Equities, Cryptos, and Commodities. He possesses strong technical and analytical skills and is well known for his entertaining and informative analysis of the global economy, fiat currency, commodities, Stocks, Indexes, Futures, and Options markets. He held a Bachelor's degree in Computer Science and Nanodegree in Programming for Data Science Enterprise.

Leave a Reply

Your email address will not be published. Required fields are marked *