U.S. retail sales rose while UK retail sales fell before Christmas – the effect on currencies
Sunny Gonzalvez
Dec. 25, 2006

U.K. retail traffic fell on the weekend before Christmas. The number of shoppers at non-food retailers on Christmas Eve, a Sunday, dropped 26 percent from the year earlier. The number of people shopping on Saturday fell 1.5 percent.

The initial results from the American retail and e-tail feedback reports are extremely positive. While the retailers saw jump of 24%, e-tailers saw a jump of 56%. The total aggregate jump in retail sales in final days of Holiday shopping was amazing.

The differential is noteworthy. The US economy is muddling along while European economies are showing signs of tiredness with lower dollar. The economy in UK and the Euro Zones can get affected badly as the new sales tax in Germany takes hold next year.

The differential will put pressure in ECB while making Fed wonder if another rate hike is warranted.

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