Dollar Takes Some Damage After Soft Data, Gold Smiles – Investing.com

Dollar Takes Some Damage After Soft Data, Gold Smiles – Investing.com

Currency markets closed with a bang last week after an American survey showed consumer sentiment cratering in August to reach its lowest level in a decade. The stunning loss in consumer confidence raised questions about the economy’s fortunes, and consequently about whether the Fed will be able to take its foot off the accelerator soon.

Capitalizing the most on the dollar’s troubles was the Japanese yen, which is very sensitive to changes in interest rate differentials and shines whenever foreign yields fall.

The question now is whether this foreshadows a sharp cooldown in consumer spending that hammers growth, or whether it is just survey ‘noise’ that won't really translate into hard data. As such, this elevates the importance of tomorrow’s edition of US retail sales, which will provide the next clue in this debate.