The US Dollar rose in the North American trading session, buoyed by the release of strong US retail sales and manufacturing activity data.
US Retail Sales Data
Official data released on Wednesday revealed that US Retail sales increased more than expected last month, boosting optimism that consumer spending will be able to lead economic growth forward at the start of the year. Consumer spending is important as it accounts for nearly 70% of the entire US economy.
In a report released by the U.S. Commerce Department, it was revealed that retail sales in the US increased 0.4% in January from Decembers reading, a figure that easily surpassed market expectations for a 0.1% rise. December’s US retail sales rose 1.0%, having been revised up from an initial 0.6% increase.
Retail sales that increase over time indicate stronger economic growth, whilst weaker retail sales are indicitive of a weakening economy. January’s upbeat sales came despite motor vehicle sales recording their largest decline in 10 months.
On an annual basis, US retail sales were up 5.6 percent from January last year.
Core Retail Sales
Core retail sales, which exclude automobile sales, rose by a seasonally adjusted 0.8% last month. The surprise jump easily surpassed market expectations for a 0.4% increase. December’s core sales were revised to a 0.4% increase from the previous gain of 0.2%.
Core sales offer a strong indication of how much of the government’s GDP report is comprised of consumer spending. US retail sales excluding gas and automobile purchases, rose 0.7% in January. The unexpected increase comfortably beat market expectations for a gain of 0.3%. December’s 0% reading has been revised up to 0.1%.
Empire State Manufacturing Activity
In a report released by the Federal Reserve Bank of New York, official data showed on Wednesday that Manufacturing activity in the State of New York increased more-than-expected last month. Manufacturing activity leapt to a seasonally adjusted 18.70, from the 6.50 recorded in the preceding month. Market expectations were that Empire State manufacturing activity would increase by 7.00 last month.
Rising US Dollar
The strong US retail sales and manufacturing activity data helped boost the US Dollar. Immediately following the data releases, the greenback rose in most major currency pairings .At the time of writing, the US Dollar Index which tracks the USD against a basket of six weighted currencies, was up 0.09% to $101.29.
