US Retail Sales fall, Producer Prices decline. Dollar comes down in Forex Trading. | CountingPips Forex Blog

September 12, 2008 - Forex Economic News

US Retail Sales fall, Producer Prices decline. Dollar comes down in Forex Trading.

U.S. Retail Sales decreased more than expected in August according to a report by the U.S. Commerce Department released today. Advance estimates of August retail sales showed that sales decreased by 0.3 percent to $381.2 billion from July. Retail sales, despite August's decline, have increased by 1.6 percent above the August 2007 level. Market forecasts were expecting a rise of 0.2 percent for August following July's revised decline of 0.5 percent from June.

USD falls in foreign currency exchange trading. August's retail sales numbers were weighted down by a 2.3 percent decrease in nonstore retailers, a 2.5 percent decrease in gasoline station sales, a 2.2 percent decrease in building materials/garden supplies dealers and a 1.3 percent decrease in electronics and appliance stores. Automobile and parts sales provided a positive contribution for August as auto sales increased by 1.9 percent after falling by 4.3 percent the previous month. Retail sales excluding automobiles fell by 0.7 percent following July's revised 0.5 percent decline and surpassed forecasts expecting sales minus automobiles to register a 0.2 percent increase.

The Producer Price Index, released in a separate report by the Department of Labor, also fell more than expected in August as energy costs dropped and eased inflation on finished goods. Producer prices decreased by 0.9 percent in the month of August following an increase of 1.2 percent in July and an increase of 1.8 percent in June. The annual rate of increase for August showed that producer prices were 9.6 percent higher than August of 2007 after July's annual rate registered a 9.8 percent increase. Market forecasts were expecting monthly producer prices to decline by 0.5 percent and the annual rate of increase to register 10.2 percent.

Helping to contribute to the lower ppi in August was the cost of energy which decreased by 4.6 percent for the month after increasing by 3.1 percent in July and by 6.0 percent in June. Core producer prices, excluding food and energy prices, rose by 0.2 percent in August following a rise of 0.7 percent in July and equaling market expectations of a 0.2 percent gain. On an annual basis, core producer prices advanced by 3.6 percent in August compared with an increase of 3.5 percent in July and just below expectations of a 3.7 percent increase.

UMichigan/Reuters Sentiment Survey at 8 month high in September.

The preliminary consumer sentiment survey produced by the University of Michigan and Reuters for September rose to a 73.1 score and reached its highest level since January. September's score follows a score of 63.0 in August and surpassed economic forecasts expecting a smaller increase to a 63.9 score. The expectations index, which measures future economic sentiment, increased from 57.9 in July to 70.9 in September while the current conditions index, which measures current economic sentiment, increased from 71 in July to 76.5 in September. The final and complete version of the sentiment survey will be released on September 26th.

US dollar falls in Forex Trading against Euro, Pound.

The U.S. dollar has been losing ground in forex trading against the major currencies after the economic releases today. The euro has gained steadily verses the dollar today as the EUR/USD pair has increased from today's opening exchange rate of approximately 1.3999 to trading at 1.4192 in the U.S. afternoon trading session. The British pound also gained against the dollar from the open at 1.7584 all the way to trading at approximately 1.7919 dollars per pound. The dollar has gained verses the Japanese yen in trading from the day's opening rate of 107.09 yen per dollar to trading at 107.59 today. Elsewhere, the dollar has lost ground to the Australian dollar at 0.8209 and the New Zealand dollar at 0.6663 while the "buck" has also lost ground verses the Canadian dollar at 1.0614 and the Swiss franc at 1.1314 in today's forex market.

EUR/USD Chart - The euro gains vs. the US dollar today in forex trading as the dollar was weighed down by worse than expected retail sales figures(Hourly Chart).

Today's Forex Chart

tags: producer prices, inflation, consumer sentiment, retail sales, forex market

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