US dollar at the best levels of the day
The US dollar cheered a surprisingly strong August retail sales report.
Covid hit hard in the month but that didn't stop consumers from spending. Even the category that contains restaurants and bars managed a flat reading in the month while online shopping and furniture sales jumped.
The US dollar cheered the report. Here's USD/JPY
It's another reminder of the old adage: Never underestimate the spending power of the US consumer.
I don't think this changes anything for the Sept 22 FOMC meeting but it will underscore confidence in everyone that a recovery is still ongoing. The one weak spot is autos though and that bears watching. There's a bit of a buyers strike ongoing right now on tight inventories and high prices; all due to chip shortages.
At times, good news can hurt broader sentiment but with soft CPI this week the market is less worried about premature Fed tightening. That's resulted in the greatest USD gains against the safe-have Swiss franc. The daily USD/CHF chart is starting to look interesting:
