How to use Retail Sales (MoM) in forex trading ?

The index of retail sales is used to describe the total number of good sol by retailers in a month. The final report is compiled after taking data from all the retailers who can of different types and sizes. This index helps to estimate the level of consumer confidence, which can be either positive or negative.
The index report is released every month in almost middle of the month. It is usually released when the markets are open and working. The main purpose of the report is to publish the data from the previous months, and then it is known as an advanced report. After the calculation of the final report, it can be easily revised. Analyst and traders mostly look at the “ex-auto” figure from this report as this means that report doesn’t include the data came from sold cars. This is because cars are an expensive item that should not be included in the final report. Without the car’s data, one can get more corrective results for the retail sales index.
The good thing is that the final report manages to combine sales data from various sources like in-store sales, retail sales, internet sales, and mail order sales. After calculating data from various sources, it is then broken down into multiple categories like clothing, food, and beverages.
Stock market is another market that keeps a close eye on the retail sales. This is because this data can help those investors who are investing in the retail companies. Additionally, the retail sale is also a huge part of a country’s GDP. If the volume of retail sales in decreased, it will directly lead to a short recession.
The retail sales data is usually correct as it is updated on the regular intervals. According to the forex market players, the data of retail sales is very hard to interpret. Traders from the Europe and Asia appreciate the rise in buying trend of Americans as this can help to increase the dollar position which is considered as a bullish trend. However, if the retail sales are too strong, it could leave the dollar into a detrimental position as many goods from the various ranges are imported. This directly means that there will be an increase in the non-dollar currencies. If the retail sales are too weak, it could lead to a recession time which will leave negative effects on the dollar.