USD: Retail sales weakness eyed – TD Securities

💡 DMK Insight

Weaker US Retail Sales could shake up market sentiment and trading strategies. TD Securities’ forecast of a 0.2% decline in December retail sales, against a backdrop of stronger consensus, signals potential weakness in consumer spending. This is crucial for traders, as retail sales data often influences Federal Reserve policy and can impact the USD’s strength. If these projections hold, expect volatility in forex pairs, particularly USD-related assets. A weaker dollar could boost commodities like gold, which often thrives in such environments. Traders should keep an eye on the upcoming retail sales release and consider adjusting positions accordingly. Watch for key levels in the USD index and related pairs; a break below recent support could trigger further selling pressure. The broader implications could ripple through equities, especially in consumer discretionary sectors, where performance is closely tied to spending trends. If the actual numbers come in worse than expected, it could lead to a reassessment of Fed rate hike expectations, adding another layer of complexity for traders to navigate.