USD Struggles Continue as Claims Beat, February Retail Sales Disappoint

Christopher Vecchio

Talking Points:

- Consumption above expectations but only after January figures revised lower.

- Implies growth in 1Q stagnated regardless of the purported weather impact.

- Data can’t stunt AUDUSD rebound, but EURUSD slips.

The consumption figures in the February US Advance Retail Sales report beat estimates across the board, but only after the January figures were revised lower. On net, US consumption is down by about -0.3% so far in 2014.Of course, one can’t dismiss the weather impact and therefore the validity of the recent data is up in the air.

On the other hand, Initial Jobless Claims beat and Continuing Claims fell, underlying the modest positive momentum in the US labor market. This data will help keep expectations elevated for further gains in the US Nonfarm Payrolls report.

Here’s the mixed data that pushed the US Dollar higher versus the Euro and the Japanese Yen and lower against the Australian Dollar (a top performer on the day):

- Advance Retail Sales (FEB): +0.3% versus +0.2% expected, from -0.6% (revised lower from -0.4%) (m/m).

- Retail Sales ex Auto (FEB): +0.3% versus +0.2% expected, from -0.5% (revised lower from -0.2%) (m/m).

- Control Group (FEB): +0.3% versus +0.2% expected, from -0.6% (revised lower from -0.3%) (m/m).

- Initial Jobless Claims (MAR 8): 315K versus 330K expected, from 324K (revised higher from 323K).

- Continuing Claims (MAR 1): 2855K versus 2903K expected, from 2903K (revised lower from 2907K).

AUDUSD 1-minute Chart: March 13, 2014 Intraday

USD_Struggles_Continue_as_Claims_Beat_February_Retail_Sales_Disappoint_body_x0000_i1027.png, USD Struggles Continue as Claims Beat, February Retail Sales Disappoint
USD_Struggles_Continue_as_Claims_Beat_February_Retail_Sales_Disappoint_body_x0000_i1027.png, USD Struggles Continue as Claims Beat, February Retail Sales Disappoint

Charts Created using Marketscopeprepared by Christopher Vecchio

Following the data, the AUDUSD slipped from $0.9066 to as low as 0.9057. However, within a few minutes of the US economic reports, the pair had rebounded back towards session highs, trading at 0.9075 at the time this report was written. The AUDUSD may be working on an Inverse Head & Shoulders reversal pattern.

--- Written by Christopher Vecchio, Currency Analyst

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