When is the US Retail Sales data and how could it affect EUR/USD?

• US Retail Sales are expected to have grown 0.4% in September after a 0.6% rise in August.
• Excluding autos, sales of all other products are seen easing to 0.4% after a 0.7% rise in August.
• A sharp decline in consumption might boost hopes of further Fed cuts and weigh on the USD.

With the US Government open again after a 43-day shutdown, federal agencies are scrambling through a backlog of data to deliver a stream of delayed macroeconomic releases. The focus today is on September’s US Retail Sales report.

The latest reference, released more than two months ago, showed a strong increase in retail consumption, with a 0.6% monthly gain beating market expectations and easing concerns about the deterioration of the labour market. Likewise, the core Retail Sales grew at a larger-than-expected 0.7% rate.

US Retail Sales data overview

The US Census Bureau will release the United States (US) Retail Sales for September on Tuesday, at 13:30 GMT. Retail consumption, a key measure of consumer spending, is expected to have moderated its growth to 0.4%, following August’s 0.6% increase. In the same line, Retail Sales excluding autos are seen growing at a  0.4% monthly pace, down from 0.7% in the previous month.

Tuesday’s Retail Sales data might have a significant impact on currency markets, as it will test the strength of US consumption, a leading contributor to the country’s Gross Domestic Product (GDP). Retail Sales are also a key element of the Federal Reserve’s (Fed) monetary policy decisions, as they hint at future inflation trends. In that sense, today’s readings will be closely observed by the market to assess the chances of an interest rate cut in December.

Rising consumer spending signals strong demand, pushing consumer inflation higher and encouraging business owners to raise prices at the factory gate. All in all, an inflationary scenario that forces the Fed to adopt a hawkish stance on interest rates. Weaker consumption, by contrast, would allow the Fed to turn dovish on policy rates to boost demand and support economic growth.

How could the US Retail Sales data affect EUR/USD?

EUR/USD is posting moderate gains but remains trapped within a narrow range, right above two-week lows at 1.1500, with upside attempts limited to 1.1550 so far, after a nearly 1% decline last week.

Recent dovish comments by Fed officials have revived hopes of further monetary easing after the December meeting, but market expectations are volatile. Investors are awaiting additional US macroeconomic data to better assess the monetary policy path. In that sense, September’s Retail Sales might be a key release. 

A sharper-than-expected slowdown in consumption would give further reasons for Fed doves to lower borrowing costs by 25 basis points in December, and might feed hopes of further monetary easing in the first quarter of 2026.

This would add pressure on the US Dollar and help the Euro to extend its recovery beyond the 1.1550 resistance area, aiming to 1.1600 and the late October highs, at the 1.1670 area.

A positive surprise, on the contrary, might curb hopes of a December rate cut and buoy the US Dollar higher. A EUR/USD break below 1.1500, in that case, would open the path towards the key Support at 1.1470, which guards the path to the August low, near 1.1400.