EUR/USD (a 4-hour chart)
The dollar was traded higher on Monday, but after the weaker-than-expected retail sales USD lost strength and the pair recovered almost all the previous losses. According to the published data, retail sales in June rose by 0.4%, but this figure was twice lower than the forecast by economists. Americans have suffered losses in connection with budget cuts and tax increases in the first half of the year.
Currency traders are closely watching economic indicators in an effort to determine when the U.S. economy will recover enough for the U.S. Federal Reserve could begin to curtail its program of asset purchases, in which the bonds are purchased each month for a total of $ 85 billion.
The disappointing retail sales data delayed start of the rolling program of the Fed on economy stimulation. In addition, "last week the Fed was more inclined to ease monetary policy," said John Doyle, director of the market division of Tempus Consulting.
Traders are waiting for further signals from the Fed amid uncertainty regarding the U.S. central bank plans to curtail the bond-buying program, which put pressure on the dollar. The U.S. currency started to show growth from the middle of June, when the Fed Chairman Ben Bernanke suggested that curtail of the program could begin as early as September. However, last week, the dollar weakened after the Fed officials tried to reassure market participants.