US dollar pares recent gains as stock markets recover

Key Movers

As mentioned earlier global risk sentiment has improved this morning which means that safe haven assets such as the US dollar, which are sought when poor economic data is released or there are global ructions from geopolitics, as seen in Afghanistan, fade from investors' memories.

Yesterday saw poor Retail Sales numbers from the States for July with a slight fall precited in the overall reading come in much worse than predicted. The overall reading slipped -1.1% m/m with the core reading, which strips out car sales, dropping -0.4% m/m when a small uptick of 0.2% was eyed. It appears US households are possibly beginning to reign in spending in the face of concerns over the Delta variant spreading throughout the country as well as rising inflation pushing prices higher.

It seems however that this uneasiness is starting to abate and markets are possibly now not expecting any big changes in monetary policy from Chairman of the US Federal Reserve, Jay Powell, in his keynote speech next Thursday at the annual Jackson Hole Economic Symposium.

Away from the States, the Reserve Bank of New Zealand kept rates on hold at 0.25% on the back of the snap lockdown imposed by PM Jacinda Ardern after an untraceable COVID-19 case was confirmed in Auckland. Later today we have the final print of July Eurozone CPI, US Building data, as well as the minutes from the last Federal Open Market Committee interest rate decision. EUR/USD trades at 1.1720.