U.S. retail sales data for September is set to be released on Tuesday, October 17, at 12:30 GMT, and this figure could have a significant impact on the U.S. dollar index and the crypto market. The consumer spending report will provide insight into how consumers are managing borrowing costs, potentially influencing the value of the greenback and, in turn, the prices of bitcoin and other risk assets.
Economists expect a 0.3% month-on-month gain in September, following a 0.6% increase in August. The core figure, which excludes the automobile sector, is forecasted to have risen 0.2% after a 0.6% rise in August. Analysts at ING predict that a softer retail sales figure could put pressure on the dollar, potentially leading to higher prices for bitcoin and other risk assets.
The dollar index, which tracks the value of the greenback against major fiat currencies, has increased by 6.7% in the past three months. This rise has been driven by the U.S. economic outperformance story, with consumer spending in the U.S. being a significant driver of this narrative. Meanwhile, bitcoin has experienced a 10% decline since its mid-July high.
ING analysts noted that a softer retail sales figure could test the late arrivals to the long dollar trade, potentially preventing the dollar index from breaking resistance at 106.75 and instead pressing intra-day support at 106.00. Analysts also mentioned that U.S. industrial production, set to be released at 13:15 UTC, could contribute to market volatility.
The U.S. Census Bureau’s retail sales report is a crucial indicator of consumer spending, which accounts for the majority of overall economic activity in the country. As such, the data could have significant implications for the U.S. economy and the Federal Reserve’s monetary policy decisions. If the U.S. retail sales data comes in weaker than expected, it could signal a slowdown in consumer spending and potentially weigh on the U.S. dollar, making it more expensive for American consumers to purchase goods and services.
On the other hand, if the U.S. retail sales data beats expectations, it could bolster the U.S. dollar and strengthen the case for the Federal Reserve to continue raising interest rates. This scenario could also lead to a more risk-averse environment, potentially causing investors to seek safe-haven assets like gold and U.S. Treasuries.
The relationship between the U.S. dollar and the crypto market is complex, with various factors influencing the value of both. For example, a stronger U.S. dollar could make it more expensive for investors in other countries to purchase cryptocurrencies, potentially leading to a decline in demand and lower prices. Conversely, a weaker U.S. dollar could make cryptocurrencies more attractive to investors, driving up demand and prices.
It is essential for investors to keep a close eye on the upcoming U.S. retail sales data and other economic indicators, as these can have a significant impact on the value of the U.S. dollar and, consequently, the crypto market. By staying informed and understanding the potential implications of these economic releases, investors can make more informed decisions about their investments in cryptocurrencies and other risk assets.
In conclusion, the release of the U.S. retail sales data for September could have significant implications for the U.S. dollar index and the crypto market. A weaker-than-expected retail sales figure could put pressure on the greenback, potentially leading to higher prices for bitcoin and other risk assets. On the other hand, a stronger retail sales figure could bolster the U.S. dollar and make cryptocurrencies more expensive for international investors, potentially leading to lower demand and prices. Investors should closely monitor these economic releases and consider their potential impact on their investment strategies.
