If you like to trade Economic News Events, you will know that one of the most prevalent market movers is a country’s reports on Retail Sales.

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Retail Sales figures are released each month and show us the change in sales from Retail Outlets to the Consumer.

These sales can come from department stores, online retailers, specialist retails, vending machines, shops, and many others.

The figures are adjusted for seasonality and for inflation and all major economies use them.

Most figures look at month-on-month sales, and the percentage change and others look at year-on-year where that month’s figures are compared to the same month a year earlier.

For most economies, “Core Retail Sales” exclude automotive sales as the larger figures may often distort the true view of general Retail Sales.

Retail Sales figures are vital to stock investors and particularly those who directly invest in retail companies.

The figures are also a big component of the total gross domestic product (GDP) of an economic region and can predict growth or recession.

Therefore, these figures are important drivers of the value of its component currency.

Like any news event, opportunities occur when the published figure is substantially different from the forecast.

Here we have an example of GBPUSD price action with UK Retail sales, where the month-on-month sales figures were quite a bit lower than analysts’ expectations driving the Pound weaker.

The pound did rebound just enough to continue the current downtrend.

Here we have a situation on USDCAD where Canadian Retail Sales were much better than predicted and the Loonie gained well over 100 pips during the next couple of hours.

The month before, the opposite had occurred as figures were worse than expected and USDCAD shot up roughly 100 pips.

This was actually a better opportunity for traders as this was a counter-trend move and, after the spreads returned to normal, investors saw this as a good time to short USDCAD or buy the Loonie.

Just to recap:

- Retail Sales are basically a measure how much consumers are spending
- When trading Retail Sales, the difference between the actual figure and the predicted figure will drive the markets
- When trading, Retail Sales will affect an economy’s currency regardless of the size of that economic region.

That’s all for now. Happy trading with Valutrades and we will see you soon.

CFDs and FX are leveraged products and your capital may be at risk.

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