EUR/USD Analysis 17-Mar-21
U.S. retail sales fell 3% in February to $ 562 billion. This value followed the January increase of 7.6% and was worse than market expectations, which suggested a decrease of 0.5%. Total sales for the period from December to February increased by 6% compared to the same period last year. Markets were expecting a correction after the strong gain in January, and almost did not react to the fall.
Consumer inflation in the euro area strengthened sharply in January and February, and is likely to rise in the coming months. This is mainly due to temporary factors, which the European regulator urges not to pay attention to. Core inflation remains subdued due to weak demand and excess spare resources in the economy. Nevertheless, the euro is declining, which is typical of periods of rising inflation, when an increase in the interest rate is predicted. The ECB notes that domestic price pressures will remain muted due to weak demand and reduced wage growth, and does not plan to change the rate in the coming years.