• EUR/USD pitched lower despite Thursday’s improved risk appetite.
• US Retail Sales climbed much higher than expected.
• US data to dominate the remainder of the trading week with consumer sentiment.

EUR/USD took a dive back below the 1.1000 handle on Thursday despite a broad-market recovery in investor sentiment. US Retail Sales growth lurched to an 18-month high of 1.0% MoM in July, well above the forecast 0.3% and entirely engulfing the previous month’s -0.2% contraction. Improving economic health indicators are helping to stave off recent concerns of a potential recession within the US. 

However, not all is rosy in financial markets post-Retail Sales. According to the CME’s FedWatch Tool, rate markets are now pricing in just 25% odds of a 50 bps double cut from the Federal Reserve (Fed) in September, down significantly from last week’s peak bets of 70% odds. Rate traders have still fully priced in a September rate trim as a done deal, with 75% odds of at least 25 basis points off of the top on September 18.