US dollar, Treasury yields trade higher on strong Retail Sales
Written by: Frank Kaberna | Senior Content Strategist, Chicago
Key points
- US Retail Sales printed higher than expected at 0.7%
- USD/JPY traded well above 154.00 after Retail Sales - highest level since 1990
- 10YR Treasury yields hit 4.6%
- 2YR Treasury yields near 5.0%
- CME FedWatch tool predicting a 12.2% chance of no interest rate cuts in 2024
- US Retail Sales printed higher than expected at 0.7%
- USD/JPY traded well above 154.00 after Retail Sales - highest level since 1990
- 10YR Treasury yields hit 4.6%
- 2YR Treasury yields near 5.0%
- CME FedWatch tool predicting a 12.2% chance of no interest rate cuts in 2024
US Retail Sales - 0.7% - higher than expected
March's US Retail Sales outperformed expectations, registering a 0.7% month-over-month increase against the anticipated 0.3%. This significant uptick indicates robust consumer spending, reflecting a potentially stronger economic outlook. This release, along with strong CPI and Nonfarm Payroll data, confirms a thriving March for the US economy - all amid 5% interest rates.
March's US Retail Sales outperformed expectations, registering a 0.7% month-over-month increase against the anticipated 0.3%. This significant uptick indicates robust consumer spending, reflecting a potentially stronger economic outlook. This release, along with strong CPI and Nonfarm Payroll data, confirms a thriving March for the US economy - all amid 5% interest rates.
US dollar continues higher on strong US data
Following the release of the strong Retail Sales figures, the USD/JPY currency pair surged well above 154.00, reaching its highest level since the 1990s. The US dollar's ascension is a direct reflection of positive economic indicators, especially prevalent against a Japanese yen boasting 0% interest rates.
Following the release of the strong Retail Sales figures, the USD/JPY currency pair surged well above 154.00, reaching its highest level since the 1990s. The US dollar's ascension is a direct reflection of positive economic indicators, especially prevalent against a Japanese yen boasting 0% interest rates.
USD/JPY price history
10YR Treasury yields hit 4.6%
The yield on US 10-Year Treasuries has climbed to 4.6%, a significant rise from below 4.0% at the beginning of the year. This increase, fueled by strong US data, suggests growing investor confidence in the economy, impacting forex trading as higher yields often strengthen the currency.
The yield on US 10-Year Treasuries has climbed to 4.6%, a significant rise from below 4.0% at the beginning of the year. This increase, fueled by strong US data, suggests growing investor confidence in the economy, impacting forex trading as higher yields often strengthen the currency.
2YR Treasury yields near 5.0%
Short-term US interest rates, particularly the 2-Year Treasury yield, are now nearing 5.0%. This rally, suggesting expectations of fewer rate cuts by the Federal Reserve, reflects market perceptions of continued economic strength and inflation concerns.
Short-term US interest rates, particularly the 2-Year Treasury yield, are now nearing 5.0%. This rally, suggesting expectations of fewer rate cuts by the Federal Reserve, reflects market perceptions of continued economic strength and inflation concerns.
Could the Fed hike interest rates again?
With Fed Funds futures from the CME now showing a 12.2% probability of unchanged interest rates in 2024, speculation grows about the Federal Reserve's next moves. While rate cuts have been the expectation since last fall, could another hike be on the table with continued US outperformance? Such possibilities have widespread implications for forex traders, who must consider potential rate hikes in their strategic planning.
With Fed Funds futures from the CME now showing a 12.2% probability of unchanged interest rates in 2024, speculation grows about the Federal Reserve's next moves. While rate cuts have been the expectation since last fall, could another hike be on the table with continued US outperformance? Such possibilities have widespread implications for forex traders, who must consider potential rate hikes in their strategic planning.
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