Dollar weakness continued yesterday as markets digested the disappointing US retail sales figure. April’s figure showed weaker consumption into Q2 sparking economists’ to push back expectations of a June rate rise. After the period of lower oil prices, many had forecast that money saved at the pump in the US would find its way to retailers as disposable income.
The Euro traded back above a key level against the Dollar yesterday whilst the Pound continued to shake off a slightly dovish BoE inflation report, where growth expectations were marked down. Sterling continued its rally threating a key level of resistance against the greenback despite a better than expected jobless claims number from the US. ECB President Mario Draghi gave his annual speech to the IMF, however action from this was relatively limited as Germany, Switzerland and France were all closed in observance of Ascension day.
Today’s docket is dominated by the US as three pieces of US high tier data hit the wires. Firstly, the empire state manufacturing index is forecast to bounce back from a poor -1.2 to 5.1 this afternoon. Industrial production and the University of Michigan consumer sentiment follow shortly after with both readings expected to improve.