Dollar Strengthens against Euro on Sales data

The US dollar began strengthening against the Euro early yesterday morning as investors expected stronger retail sales and inflation data. The USD continued this strengthening trend as US treasury prices fell. As a result, the Euro hit a two month low in morning trading falling from yesterday’s high of 1.3364 to 1.3270.

The 100 pip currency move was in line with data that came out at 8:30 am. May retail sales were the strongest for the past year. The 1.4% increase doubled most estimates and showed that the US consumer has not been put off by record gasoline prices and falling home values.