Downside room for the USD probably remains limited – ING

The Dollar did not rally very aggressively after the Retail Sales figures which smashed estimates. Economists at ING analyze Greenback’s outlook.

Only a positioning tilt?

US Retail Sales has confirmed that the US strong activity narrative remains untouched. However, the Dollar has corrected lower, which may well be down to positioning adjustment.

We could see some China-related optimism spilling over equity performance today and keep some pressure on the Dollar, even though the big jump in US short-term yields suggests the downside room for the USD probably remains limited for now.

The US calendar today may not move rates and FX as much as on Tuesday, and a lot of focus will be on diplomatic developments in the Middle East.