Dollar booster? Low expectations, market mood point to a clear reaction
- Economists expect a minor increase in US Retail Sales in July.
- Lower expectations seem unjustified amid a rapidly growing economy.
- The greenback is rising amid Fed tapering fears and has room to rise.
Never underestimate the American consumer – everyone visiting the US has seen its shopping culture, either at the mall or by seeing piles of carton boxes outside houses. However, it seems that economists forecasting the upcoming Retail Sales report for July are either underestimating consumers or at least, being a tad too cautious. That implies figures could beat estimates, boosting the dollar.
Economists expect overall sales volume to have dropped by 0.2% in July after an increase of 0.6% in June. Justification to such pessimism may have come from the see-saw recorded in recent months – June’s rise came after a drop in May, as the chart shows: