The previous trading session reading was 94.39, and this is reflected in the exchange rate of the EUR/USD currency pair which dropped on the day.From the above chart, it is clear that the EUR/USD currency pair is trading at 1.1251, down from well over 1.1500 several weeks ago.The strength of the USD and the weakness of the EUR are evident during this highly volatile trading session.
the US retail sales report was released, indicating a 0.5% rise between April 2016 and May 2016. And, it follows hot on the heels of a 1.3% rise between March 2016 and April 2016.
This is good news for the US economy, and the Fed which is scrutinizing the economic indicators in anticipation of a hike in interest rates in the foreseeable future.
With two successive months of retail sales growth, US consumers are clearly in a ‘buy mode’, following weakness during the March period when a -0.3% performance was recorded and the consensus forecast was 0.3% growth.
This type of economic data is good news for the USD, as indicated by the US dollar index which is currently trading at 94.87, for an increase of 0.486 on the day.
Unemployment claims bested consensus forecasts of 269,000 with just 264,000 claims being made.
All of these factors are to be viewed positively vis-à-vis the Fed decision to hike interest rates in the coming months.Euro bulls were naturally dismayed at recent comments made by the President of the European Central Bank, Mario Draghi.Naturally, one of the biggest fears facing currency traders and one that is generating tremendous anxiety in the markets is the upcoming Brexit vote in the next week.All of this should be viewed against the backdrop of a poorly performing US currency on the back of the 38,000 nonfarm payrolls increase for April 2016.That figure was well below analysts’ forecasts, but it hardly features given the upbeat performance of employment data that was released in the US recently.According to JOLTS reports, forecasts of 5.67 million job openings were exceeded by actual improvements of 5.79 million people.