The United States dollar index falls modestly after U.S. data came out. Ahead of the European Union conference, the euro hovers near a four-month high.
Domestic retail sales data for June came in better than was forecasted. Nevertheless, the move was limited by jobless claims and a drop in United States equities. Thus, on Thursday, in morning trading, the safe-haven United States dollar fell modestly.
According to a report from the Commerce Department, retail sales in June increased for the second consecutive month. The United States dollar measures the currency against a basket of six rivals. It was last down by 0.07% to 95.940.
On Thursday, a separate report from the Labor Department showed that 1.3 million people filed for state unemployment benefits amid the week ending on July 11. It is slightly down from the 1.31 million figures in the prior period. Nevertheless, the report showed that a resurgence in new COVID-19 cases was chipping at the budding recovery.
With the S&P 500 index last going down by 0.64%, the three major United States stock indexes all fell as a result.
Mazen Issa works at TD securities. He is a senior exchange strategist there. Issa said that the data, in general, was constructive to United States retail sales. However, he thinks that, for foreign exchange, things have not changed.
He explained that that is because, since the bottom in the stock market on March 23, forex markets of exchange have been highly correlated with equities.
The data has not been a focal point for currency markets. It has been concerned with risk asset performance so far. This has been motivated by the idea that as poor as the data may be in the coming months, you must have a monetary and fiscal backstop. There is a lot of faith being placed in central banks. Thus, the collapse in the volatility of forex has been reflective of that fact.
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