The previous weeks NFP nonfarm payroll release of 215,000 jobs created was just light of market predictions, leaving the US dollar unconvinced in either direction.  The US dollar was little changed against the British pound, but came under pressure against the single currency as the week comes to a close. 

As global currency wars escalate – nations are looking to weaken their currencies with the aim of offering cheaper export goods to gain a competitive advantage – the surprise devaluation of the Chinese Renminbi, and three day decline was halted on Thursday, following reassurances from the People Bank of China that there is no basis for the CNY to continue to depreciate. 

US retail sales - often a good barometer to assess economic sentiment - saw sales growth of 0.6% in July from a month earlier. Such a result is a positive sign that the US consumer is helping to deliver domestic growth within the world’s largest economy. In normal times this would further suggest US interest rates being increased sooner rather than later. However, as the Chinese currency devaluation takes hold the PBoC’s action will effectively export deflation to the USA at a time when price pressures are rather benign, postponing the start of the US interest rate hiking cycle. 

We ended the week looking towards the University of Michigan Consumer Sentiment survey, which helps offer a view of consumer spending, possibly well aligned to the sales data released a day earlier.