US Dollar Index Drops as Correction Comes

US dollar index is a little bit lower today, dropping after the greenback logged some serious gains earlier. There’s a correction under way as recent retail sales data remains strong in the minds of Forex traders.

Things have been a little bit volatile over the last few hours, thanks in large part to repositioning, and speculation about the future. US dollar index has moved lower, even though the US dollar was hitting recent highs not too long ago.

Part of the reason the dollar index is dropping again has to do with the fact that there is a correction under way. With the recent retail sales data, this isn’t too much of a stretch. The Commerce Department in the United States reported flat retail sales for July, instead of the 0.2 per cent increase many analysts were hoping for.

Speculation about when the Fed will raise rates remains a major part of dollar index performance. However, until the economic situation and the employment situation jive a little better, there isn’t much likelihood that rates will go higher.

At 13:39 GMT the US dollar index is down to 81.4650 from the open at 81.5990. EUR/USD up to 1.3393 from the open at 1.3365. GBP/USD is down to 1.6687 from the open at 1.6688. USD/JPY is down to 102. 3505 from the open at 102.4175.

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