Today at 1:30 pm BST the US retail sales data for August will be released. This is the last important report ahead of the Fed's decision next week. It is worth mentioning that after weak labor market data and high inflation which may suggest a peak now investors expect another weak retail sales report. This potentially gives the Fed a chance to maintain its current policy. The dollar, however, is not giving up.

The market expects the reading of -0.7% MoM, although not so long ago the forecast assumed -1.0% MoM decline. The previous reading showed -1.1% MoM decline. Core sales are expected to drop by 0.1% MoM against the previous decline of 0.4% MoM. As one can see, the condition of US consumers has weakened recently. Source: Bloomberg

Nevertheless, the dollar is clearly gaining, which may be a kind of surprise. This move is not determined by volatility in bond yields. Sentiment in the equity market worsened slightly, but the dollar's strength ahead of a potentially weak reading is puzzling. EURUSD is testing key support at 1.1770. Source: xStation5
Chart of the day - EURUSD (17.10.2025)
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