The US dollar is trading relatively flat amid the broader financial markets erasing their early gains and sliding into negative territory. The greenback has been on a tear in recent months, advancing more than 3% year-to-date. With concerns over the economy and worries about coronavirus cases, investors might be keeping one foot in the conventional safe-haven asset.
According to the US Census Bureau, retail sales rose 0.6% in June, up from the 1.7% decline in May. The market had penciled in a drop of 0.4%. The retail trade reported higher sales at stores in specializing in electronics, gasoline, apparel, and food. Building materials and food services also recorded higher sales.
On an annualized basis, retail sales soared 18% last month.
Meanwhile, manufacturers’ and trade inventories rose 0.5% in May, up from a 0.1% jump in April. This represented the tenth consecutive month of growth in business inventories. Year-over-year, business inventories climbed 4.5%.
While June retail sales beat forecasts, market analysts are concerned about growing consumer inflation projections. The University of Michigan’s inflation expectations swelled to 4.8% this month, while five-year inflation expectations also jumped to 2.9%. Consumer sentiment tumbled to 80.8, consumer expectations decreased to 78.4, and current economic conditions slipped to 84.5.
Other financial analysts are warning about diminishing savings and the expiration of fiscal support mechanisms. Plus, Treasury Secretary Janet Yellen recently warned that Americans can anticipate “rapid inflation” for many more months to come.
The US Treasury market was mostly in the green to finish the trading week, with the benchmark 10-year yield up 0.02% to 1.317%. The one-year bill picked up 0.002% to 0.076%, while the 30-year bond rose 0.024% to 1.943%.
The US Dollar Index (DXY), which gauges the greenback against a basket of currencies, slid 0.05% to 92.67, from an opening of 92.59. The index is poised for a weekly boost of 0.6%.
The USD/CAD currency pair was flat at 1.2596 at 15:14 GMT on Friday. The EUR/USD was also unchanged at 1.1811.