The continuation of the weakening trend of the US dollar is expected. Today, the US retail sales and industrial production data will be released. Since July, there has been a strengthening of the selling pressure on the US dollar. The US employment statistics showed slower job growth than expected, leading to a decline in US bond yields and a drop in the dollar. However, the decrease in unemployment rates and wage increases indicated overall strength in the US labor market. The demand for safe-haven dollar buying has diminished in this situation. Additionally, the slower-than-expected growth of the US consumer price index has fueled speculation in the market about a potential pause in interest rate hikes in September, further intensifying the selling pressure on the dollar.
Today’s schedule includes the release of the US retail sales and industrial production data. It is anticipated that the retail sales for June will show positive growth both on a month-on-month basis and on a core month-on-month basis. The industrial production for June is also expected to recover slightly. There are no expectations for exceptionally strong numbers, and the outlook regarding the avoidance of a hard landing caused by US interest rate hikes is unlikely to change. With the upcoming Federal Open Market Committee (FOMC) meeting next week, the market reaction to today’s indicators is expected to be limited.
Other indicators to watch include US corporate inventories (May), NAHB Housing Market Index (July), and US securities investment (May). In Canada, the housing starts (June), industrial product prices (June), and consumer price index (June) will be released. The forecast for the Canadian consumer price index is a slowdown in year-on-year growth to +3.0% from the previous +3.4%.
Today’s focus is on the US retail sales and Canadian consumer price index. It will be important to follow the subsequent movements of the USD and CAD based on this data.
