The US has seen some poor data this month, but retail sales figures, released on Friday, showed the highest climb in over a year. A measure of consumer confidence also rose to an almost one-year high. While all appears to be well with the American consumer, Chinese data released this weekend was dim and further demonstrated a contraction in growth. Retail sales came in below estimates, and investment data and industrial production were also below expectations, on top of pullback in credit growth.
With massive job cuts, a merger being called off between the second and third largest oil companies, and a couple of bankruptcies, oil has had a very difficult time of it. Could it now be entering into a long-term recovery? Goldman Sachs increased its price target for crude for the latter of 2016 to $50 a barrel, and very early this morning, a barrel had risen to $47.09.
The Brexit referendum, despite being an “if” question, has nevertheless generated waves of volatility that have plunged the pound to a seven-year low. The dollar is no less vulnerable to politics, and many currency traders are warning about a similar fall-out for the greenback with the US general election in November. Foreign exchange volatility is also expected to increase due to rising scrutiny of countries that are suspected of manipulating their currencies for trade advantage. In the last month, the Treasury Department has put China, Japan and Germany on a watch list. Both Clinton and Trump, the presumptive nominees for their parties, have made promises that unfair pricing impacting trade will not go unnoticed, raising concerns about global currency conflicts and US protectionism.
EURUSD: No big change in the euro after a quiet news weekend.
GBPUSD: Pound steady as we look ahead to inflation, unemployment and retail sales reports this week.
AUDUSD: Aussie dollar has risen the most among these four currency pairs, taking China’s bad news as its boon.
USDCAD: Canadian dollar receiving a boost from positive oil news.