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US Dollar Index Posts Slight Gains

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US dollar index crosses 99

The US dollar index, which measures the strength of the US dollar against a basket of six currencies, continued to garner strength on November 13 as it rose to a high of 99.2 before closing the day at 98.8. The index fell during early trade as the European GDP (gross domestic product) came in on a positive note and the European trade balance came in above forecasts at 20.5 billion euros. As the US retail sales data were released later in the day, the dollar started retracing the losses.

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Retail sales were below forecasts but better than previous month’s figures

The U.S. Census Bureau published retail sales data for the month of October on November 13, 2015. Retail sales rose by 0.1% after remaining unchanged in September but fell short of the forecasts of a 0.3% increase. Also, there was a surprising fall of 0.5% in consumer spending in the motor vehicles sector. The reports seem to suggest that money saved on cheaper gasoline is not leading to increased spending elsewhere. While the core retail sales grew 0.2% against expectations of a rise of 0.4%, online retailers experienced strong growth of 1.4% in October.

Impact on the market

ETFs that relate to the retail sector were trading on a negative note after the release of lower-than-expected retail sales on November 13, 2015. The SPDR S&P Retail ETF (XRT) fell sharply by nearly 3.8%, and the VanEck Vectors Retail ETF (RTH) fell by 2.8%.

Automobile giant Ford Motor Company (F) fell 0.85% after the retail data release. Walmart (WMT) and Macy’s (M) fell 0.93% and 4.2%, respectively.

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