US Dollar Continues to Climb Whilst Euro Flounders

Yesterday, despite inflation being at its highest level in three decades, the US Commerce Department reported that retail sales rose 1.7% in October, providing the world’s largest economy with a strong start to the final quarter of 2021. 

This is the third consecutive month US retail sales have increased and the latest figure significantly exceeded economists’ expectations of 1.4%. 

The news helped push US equities higher - with the Dow Jones, S&P 500 and NASDAQ all rising during the session.  

The increased optimism also thrust the US dollar higher, as it maintains its recent positive run, causing the US dollar index to end the day at its highest level since July 2020. 

In contrast to the dollar, the euro continues to flounder as Europe struggles with rising Covid-19 cases, which have forced Austria, Germany and the Netherlands to reintroduce stricter measures in an attempt to curb infections. 

As a result, the EURUSD continued its downward spiral, which has seen it fall 7.4% since the beginning of June, reaching a 16-month low in the process.  

Taking all this into account, it would be of little surprise if the EURUSD continues to follow its downward momentum over the coming sessions. However, we will have to listen for any news which may affect the currency pair from European Central Bank President Christine Lagarde, who speaks later today. 

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