U.S. retail sales to be the next test for investors

154
3
U.S. retail sales to be the next test for investors

U.S. retail sales on Friday will be next test for dollar sales in the U.S. retail industry.

Bitcoin hits $60,000 as first ETF is in play for traders in the U.S.

LONDON, Oct 15 Reuters - The dollar headed toward its first weekly decline against major peers since the start of last month on Friday as Global risk appetite rebounded, while the Japanese yen headed towards a three-year low and the price of bitcoin hit nearly $60,000.

The dollar index slipped 0.1% to 93.9 and was down 0.2% for the week in what would be its first weekly loss in six weeks. The greenback tends to increase when investors seek safety.

The global stock markets have rallied this week as fears about a stagflationary economy have been eased by forecast-beating corporate earnings in the United States.

Only against the currency yen - another currency considered a haven - has the dollar managed to maintain momentum of the past five weeks, touching 114.18 yen on Friday and rose 0.4% for the first time since November 2018.

Analysts said investors had long dollars squeezed out of their positions in the past few days, and inflation data did not support a further rise in the currency.

The absence of any upside surprise in US CPI consumer price inflation data and confirmation of existing expectations on Fed tapering in the minutes provided no catalyst for additional USD buying and hence the sell-off, said MUFG analyst Derek Halpenny.

The greenback had rallied since early September on expectations the U.S. central bank would tighten monetary policy faster than initially expected amid an increasing economy and rising energy prices.

Minutes of Fed's September meeting confirmed this week that a tapering of stimulus is all but certain to start this year, although policymakers are sharply divided over inflation and what they should do about it.

Money markets are anticipating around 50-50 odds of a 25 basis point rate hike in July.

The next major glimpse of the U.S. economy's health comes later in the week with the release of retail sales figures.

The euro edged up 0.1% to $1.1611 after touching $1.1624 for the first time since Sept. 4 on Thursday.

Sterling rose 0.4% to $1.3722, following its climb to the highest level since Sept. 24 and that of $1.3734 overnight.

We end the week with risk flying, wrote Chris Weston, Head of Research at the brokerage Pepperstone in Melbourne, in a client note.

Equities are going up hard, and the JPY has no place as a hedge, because it would drag on global portfolio performance, Weston said.

In crypto markets, Bitcoin rallied as high as $60,000, an almost six month peak, as traders became increasingly confident that U.S. regulators would approve the launch of an exchange traded fund based on its futures contracts.