Dollar Extends Gains After Strong Retail Sales

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Dollar Extends Gains After Strong Retail Sales

JUNE 14, 2019

The U.S. dollar was out of the spotlight overnight but looks to see some movement this morning as the economic docket is fairly busy.

Overview

As a whole, the dollar is slightly stronger and has gained 0.2% this week.

Retail sales beat expectations and have allowed the greenback to extend its overnight gains.  Overall sales rose 0.5% in May but last month’s reading was upwardly revised.  The control group also showed decent growth of 0.5%.  Later, industrial production and the University of Michigan consumer sentiment are expected to show slight improvements in May from April.

Trade concerns continue to weigh on risk sentiment.  Yesterday a group of more than 600 companies and trade groups sent a letter to President Trump titled “Tariffs Hurt the Heartland.”  In it, the group rightly argued that “Tariffs are taxes paid directly by U.S. companies including those listed below – not China.”

What to Watch Today…

  • Industrial Production and U. of Michigan

Complete Economic Calendar can be found here.

JPY

The Japanese yen rose again against its rivals including the U.S. dollar as risk sentiment remains off. U.S. equity futures point to a lower open, and European stocks are half a percent lower.  Trade war risks and the recent unrest in the Middle East have traders feeling cautious ahead of the weekend.  The U.S. has pointed the finger at Iran over the attack on two oil tankers easier this week but Iran has denied it.

NZD

The New Zealand dollar was the biggest loser overnight.  Kiwi manufacturing PMI index dropped to a six-week low, increasing the chance of an interest rate cut.

Kiwi’s antipodean counterpart, the Australian dollar, has also been under pressure following a recent interest rate cut and as traders began to move forward expectations of the next cut by the Reserve Bank of Australia.

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