"It's not looking good for consumer spending. Even if you have some modest improvement in the pace of employment growth, that's not enough to generate a huge improvement in income."
- Guy Berger, U.S. economist at RBS Securities Inc.
The U.S. Dollar was traded lower on Thursday following disappointing fundamental data from the world's largest economy, with both retail sales and unemployment claims surprising markets to the downside. The buck lost 0.70% to 1.3688 against the Euro as data came public. It is interesting that Dukascopy sentiment index indicates that traders are getting more bullish on the U.S. Dollar, as they are selling EUR/USD now more often than five days ago. Moreover, the Dollar is bought in almost 66% of the time.
However, these figures contrast with the data from Labor Department and Census Bureau. The first office reported the number of initial jobless claims rose 339,000 last week from 331,000 a week earlier, and falling short of analysts' expectations of the same reading.
What is more important is the fact retail sales declined 0.4% in January, following a revised 0.1% fall a month earlier. That was the worst performance since June 2012 and the main reason behind it was bad weather conditions and uneven progress in the labour market, raising concerns the economy is off to a slow start this year as consumer spending accounts the majority of overall economic activity.
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