The US dollar initially made moderate gains after the retail sales report but has struggled to hold them. Some of that could be technical resistance as USD/JPY tries to break above the pre-CPI range.
The implied odds of a 75 bps Fed hike at the September meeting ticked off of 60% after the data from 58% beforehand but have since slid to 52%. That might be a reflection of falling equity futures. S&P 500 futures are down 38 points.
The bond market is pushing in the other direction today with yields up 5 bps to 2.88%.
Up next for the dollar are comments from the Fed’s Bowman at the bottom of the hour. She spoke on August 6 so not much has changed since then when she said:
“I supported the FOMC’s decision last week to
raise the federal funds rate another 75 basis points. My view is that
similarly-sized increases should be on the table until we see inflation
declining in a consistent, meaningful, and lasting way.”
That was hawkish but didn’t have much effect on markets.