Dollar strength prevails, US retail sales today’s highlight…
The story so far this week is of a greenback which simply refuses to give up ground against many of the majors. Today sees a key US economic data print which has just enough importance to potentially rock the boat for the buck.
The last 18 months have seen a robust and resilient US dollar which, for the most part, has strengthened considerably against a variety of counterparts. Not so long ago, the pound and euro were trading at $1.43 and $1.25 against the dollar. We now find ourselves over 13 cents lower on each of those pairs with a greenback which currently refuses to surrender any ground. The US economy still performs well albeit at a slower pace than across the last couple of years. The Federal Reserve have now ended their rate increase cycle and maintain interest rates at an attractive 2.25% – 2.50% level. Whilst this is the case the mighty US dollar will remain the choice currency. Essentially, the best of a fairly bad bunch.
Today holds the next big test for the buck. Retail sales! The consumer plays a massive part in any economy. Without consumer spending there would be no jobs and without jobs there is no growth. The US consumer has held up well over the past 12 months. Trump’s tax cuts and focus on the economy and stock market have ensured Americans have continued to put their hand in their wallets. However, a recent rise in tension over US/China trade may just have had enough time to filter into the consumer’s thoughts. The report is released today at 13.30 and could create volatility across the major pairs, especially GBPUSD, which is teetering on breaking into the $1.28s again.
Written by Viv Savani. 8:45am, May 15th 2019
The details expressed in this market report are for information purposes only and are not intended as a solicitation for funds or a recommendation to trade. Cornhill International Payments limited accepts no liability whatsoever for any loss or damages suffered through any act or omission taken as a result of reading or interpreting any of the above information.