Retail sales in the United States rose by 0.6% in November, reaching $735.9 billion. This growth exceeded the market’s expectation of 0.4%. It follows a 0.1% decline in October, according to the US Census Bureau. From September to November 2025, total sales grew by 3.6% compared to the same time last year. A previous report indicating no change from September to October was updated to show a 0.1% drop.

US Dollar Performance

The US Dollar faced slight losses, trading defensively around the 99.00 mark due to falling US Treasury yields and responses to the Fed’s stance on independence. Other influencing factors included geopolitical events, such as President Trump’s actions in Venezuela and tariffs on countries dealing with Iran. The Retail Sales Control Group, which gives a clearer picture by excluding certain sectors, showed a 0.8% rise in October. This measure aligns closely with consumer spending data in GDP. Real GDP grew at an annual rate of 4.3% through September, bolstered by increased consumer spending, exports, and government spending. For November, a 0.4% increase is expected, which will need close attention for its impact on the USD. Market movements were also affected by the Consumer Price Index (CPI), reporting annual inflation at 2.7%—exactly as predicted. As we review the November retail sales data from mid-January 2026, last year’s report indicated strong consumer activity, suggesting a solid economy leading into the holiday season. However, fresh data for December 2025, released last week, revealed a slowdown with only a 0.2% growth in sales, likely due to the government shutdown and ongoing high prices.

Federal Reserve Position

The Federal Reserve is in a tough spot, having started modest rate cuts in late 2025. With inflation still high—the December Consumer Price Index remained at 2.7%—further cuts are now less certain. This uncertainty about the Fed’s future actions has created opportunities in interest rate futures and options, as the market is split on whether the cutting cycle will pause. Currently, market focus has shifted from economic data to rising geopolitical tensions. A new 25% tariff on countries trading with Iran has led to increased market volatility, with the VIX index rising from around 15 to above 28 in the first two weeks of January. Given this volatility, buying options to hedge against or speculate on sudden price changes in major indices may be a wise approach. These geopolitical issues are exerting pressure on the US Dollar, which remains weak despite last year’s strong consumer performance. Safe-haven currencies like the Swiss Franc have gained strength, and implied volatility in currency pairs like EUR/USD is rising. Trading volatility through options strategies, such as straddles, could be advantageous as this pair remains unstable but could shift sharply with new developments. Derivative traders should pay close attention to commodities responding to the current geopolitical situation. Gold has surpassed the all-time high of $4,640 mentioned in last year’s analysis, and oil has become a central focus. Brent crude futures have climbed above $110 per barrel following the Iran tariff announcement, making energy derivatives crucial for managing risk and seizing opportunities. Create your live VT Markets account and start trading now.

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