Retail sales in the United States were nearly the same in October, at $732.6 billion, according to the US Census Bureau. This follows a slight increase of 0.1% in September, revised down from an initial 0.3%. October’s sales did not meet the expected 0.1% growth. From August 2025 to October 2025, total sales increased by 4.2% compared to the same period last year. Retail trade sales saw a small rise of 0.1% from September 2025, which is a 3.4% increase from last year.

Market Reaction

During the American session, the US Dollar Index faced slight downward pressure, dropping by 0.16% to 98.10. The October retail sales report was disappointing, showing flat sales and a downward revision for the previous month. This trend suggests that American consumers, who are vital for the economy, are slowing down as the holiday season approaches. The weaker US Dollar indicates that the market is adjusting its expectations for future economic growth. This lackluster consumer data supports the idea that the Federal Reserve may consider cutting interest rates sooner than expected. The latest November Consumer Price Index (CPI) data shows inflation cooling to 2.8%, giving the Fed more flexibility to support the economy. Additionally, we’ve seen a significant slowdown in revolving credit growth during the third quarter, highlighting cautious consumer behavior. Given this situation, we can expect increased activity in interest rate derivatives that bet on lower rates. Traders now see nearly a 60% chance of a rate cut by the March 2026 meeting, up from 40% before this report. This shift indicates that the market is preparing for a more accommodating central bank policy soon.

Implications for Traders

This environment recalls the slowdown of late 2018, when weak economic data led to a significant policy change from the Federal Reserve. We anticipate a rise in demand for protective put options on major market indices like the S&P 500 as traders look to safeguard their portfolios against potential risks as the year ends. The decline in the US Dollar Index results directly from these revised rate expectations, making the currency less appealing. This trend may continue, making options strategies that bet against the dollar more attractive in the coming weeks. A weakening consumer undermines a key support for the dollar’s recent strength. Create your live VT Markets account and start trading now.

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