Will Consumers Help Retail Sales?

12-03-2010

USD
The USD lost ground to both the EUR and GBP on Thursday as Wall Street turned in its second consecutive day of gains. Though the positive returns on the major indexes were not huge it may have been enough to propel some international risk sentiment. The weekly Unemployment Claims were released and disappointed investors with a 462K, which was above the expectation of 452K. Today Retail Sales reports are on the calendar from the States and traders who have been staying low most of the week due to an absence of major data may be poised to strike with any surprises. Both the Core and broad Retail Sales figures are expected to be rather flat. Also the Consumer Confidence from the University of Michigan will be brought forth and the Preliminary reading is estimated to be 74.0.
The greenback has essentially traded in range this week and going into the weekend could be poised to find some volatility if investors see any room for maneuvering. Wall Street has produced consolidated trading for a while and if it should make a strong turn this could spur the markets into action. Next week will see much more fundamental data than what has transpired the past four days. Today’s Retail numbers are expecting a rather lackluster display and some analysts are pointing to the severe weather that hit key consumer regions in the States as a reason for a possibly disappointing outcome. The USD found itself under pressure yesterday as the EUR rebounded. The decision that traders will have to make today is whether the USD may continue to find some short term weakness.

EUR
Perhaps traders have gotten tired of watching ‘the horse get beaten’, this as the EUR gained on Thursday without any new fundamental issues resolved regarding the Greek debt situation. While Greece was shut down in many areas due to major organized strikes taking place, the EUR currency did show the ability to find some momentum. European Industrial Production numbers are on the schedule today along with German WPI statistics. The Industrial Production data from Europe is expected to improve, while the German inflation report is anticipated to be fairly unspectacular. Going into today’s last trading session for the week the EUR has been able to hold onto its ground as a whole. While many of the outstanding issues regarding the Sovereign debt concerns of Greece remain unanswered it is possible that for the time being traders have been able to push these considerations to the side.

GBP
Without any major economic data reported on Thursday the GBP enjoyed a better performance against the USD. The Sterling struggled much of this week under rather negative economic data. Today will also be very quiet for news from the U.K. and this will leave the GBP able to trade under the banner of risk sentiment. Yesterday proved to be a positive day across the international bourses and this result may have enhanced the Sterling’s ability to enjoy a day in the sun. The GBP has faced pressure much of this week, but going into the weekend may find that it has some wind in its sails and find some backers.

JPY
The JPY and USD continued to prance along on the dance floor and perform their version of the ‘safety dance’. The pair has shown a remarkable ability to stay in place in what has been an extremely consolidated marketplace. International bourses have shown some positive movement the past couple of days but this has been weighed down by Asian investors who are still quite cautious. Gold did rise slightly yesterday as the greenback slipped against other major currencies and its story could prove an interesting one as the day progresses.

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