ForexLive Americas FX news wrap: US retail sales beat estimates but the market doesn’t care

News

Forex news for New York trade on July 16, 2021:

Markets:

  • Gold down $18 to $1810
  • US 10-year yields down 0.2 bps to 1.295%
  • WTI crude oil down 18-cents to $71.41
  • S&P 500 down 33 points to 4327
  • GBP and AUD lag, NZD leads

Retail sales were much stronger than expected and the strength was broad-based but the FX market largely cast the report aside after an initial pop in USD/JPY and some modest moves elsewhere. Equities tried to run with the report and a decline in futures was erased. That carried through into the open but the high for stocks came right at the open and the selling continued and extended after the UMich data, which painted a different picture of consumers.

Commodity currencies took the brunt of the pain with AUD/USD falling to the lowest since December and USD/CAD rising to a three-month high. The kiwi fought off the bearishness on account of the hawkish central bank but was flat in US trading.

Cable is increasingly risk sensitive. Or is that a sign that all markets are being pulled around by the delta variant? It finished on the lows of the week at 1.3763 in a 65 pip loss on Friday that put it in line with AUD as the laggard.

EUR/USD wasn’t much of a mover in the session as it tried to push lower early but caught bids at 1.1793 before slowly tracking up to 1.1818 and then finishing in the middle.

Overall, I’m torn between brushing this all off as a sign of consolidation and a summer market and getting increasingly worried about variants and long-term, endemic covid worries; if not new virus control measures in the fall. Have a read of my latest.

Have a great weekend

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