US dollar, Treasury yields trade higher on strong Retail Sales
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 - 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.
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.
USD/JPY price history
10YR Treasury yields hit 4.6%
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.
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.
How to trade US dollar
- Open an account to get started, or practice on a demo account
- Choose your forex trading platform
- Open, monitor, and close positions on USD pairs
Trading forex requires an account with a forex broker like tastyfx. Many traders watch major forex pairs like GBP/USD and USD/JPY for potential opportunities based on economic events such as inflation releases or interest rate decisions. Economic events can produce more volatility for forex pairs, which can mean greater potential profits and losses as risks can increase at these times.
You can help develop your forex trading strategies using resources like tastyfx’s YouTube channel. Our curated playlists can help you stay up to date on current markets and understanding key terms. Once your strategy is developed, you can follow the above steps to opening an account and getting started trading forex.
Your profit or loss is calculated according to your full position size. Leverage will magnify both your profits and losses. It’s important to manage your risks carefully as losses can exceed your deposit. Ensure you understand the risks and benefits associated with trading leveraged products before you start trading with them. Trade using money you’re comfortable losing.
This information has been prepared by tastyfx, a trading name of tastyfx LLC. This material does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. You should not treat any opinion expressed in this material as a specific inducement to make any investment or follow any strategy, but only as an expression of opinion. This material does not consider your investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. No representation or warranty is given as to the accuracy or completeness of the above information. tastyfx accepts no responsibility for any use that may be made of these comments and for any consequences that result. See our Summary Conflicts Policy, available on our website.
