Top-tier US data was released on Good Friday. The data came out below expectations, but the dollar is only reacting in the most obvious place: USD/JPY. Dollar/yen often best reflects American indicators. Will other currency pairs react later on?
US CPI dropped 0.3% month over month, worse than 0% expected. Core CPI is also down 0.1% against an increase of 0.2% predicted. On a yearly basis, CPI is up 2.4% instead of 2.6% expected. Core inflation is at the magic 2% level, but also here, it is below the 2.3% level predicted.
Retail sales are down 0.2% instead of +0.1% and core sales are flat, falling short of 0.2% projected. Downward revisions worth 0.2% exacerbate the falls in retail sales numbers for March.
The control group surprised with a rise of 0.5% instead of 0.3% predicted, yet also, in this case, a downward revision worth 0.3% erases the surprise.
It seems there is no correlation between elevated consumer confidence and actual spending. The gap between the soft data and the hard data widens.
Here is how the move looks on Dollar/yen. Note that the pair reached 108.61, the lowest level since November 2016.
