The US economy is recovering from the crisis, but slowly

US released data on inflation and retail sales for June. Retail sales rose by 0.6%, while sales excluding motor vehicles - by 0.7%. The data exceeded market forecast (0.1% and 0.4%, respectively) and were better than May levels (0.2% and 0.4%). However, inflation in June did not meet market expectations. Thus, the consumer price index rose by 0.2%, while the market expected a higher pace of overcoming deflation (0.3% growth). Information is ambiguous: on the one hand, the June inflation rate somewhat disappointed, on the other hand - steady growth in retail sales suggests reduction of deflation in the future, as high demand from retail customers can maintain higher prices and contribute to the output of the US economy from the stage of deflation. However, it seems that the Fed does not keep too much illusions about a fast overcoming of deflation.
The Fed is now at a crossroads: on the one hand, there is a mood to raise rates within this year, on another - raise rates is dangerous, because not all threats to the US economy are eliminated. The increase in rates is possible if the US economy starts to give clear signals of overcoming the crisis, in other words, when the most important indicators, not just retail sales, but also such as the level of employment and inflation, will demonstrate the dynamics in line with market expectations and even start to become better than expected.
For now I do not expect substantial growth of the dollar. Probably within the next week the corridor on the euro/dollar could reach 1.11-1.12.