Dollar Starts the Quarter Weaker; Retail Sales Contract

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Dollar Starts the Quarter Weaker; Retail Sales Contract

APRIL 01, 2019

The U.S. dollar is slightly lower to start the quarter after gaining for four consecutive quarters.

Overview

Stronger than expected Chinese manufacturing data helped ease some concerns over global growth and lessened demand for the safe-haven dollar.  Chinese PMI rose to 50.8 in March, showing growth and beating estimates of 50.0.

Chinese-American trade talks are expected to continue this week as Vice Premier Liu He arrives in Washington amidst a backdrop of small signs of progress.

The economic docket showed that U.S. retail sales unexpectedly fell in February, highlighting more headwinds for the economy in the first quarter.  Overall sales fell 0.2% but January’s print was upwardly revised to 0.7%.  Later, ISM manufacturing data will hit the wire which is expected to show decent growth, highlighting the difference between the U.S. and mainland Europe.

What to Watch Today…

  • U.S. PMI at 9:45 a.m.

Complete Economic Calendar can be found here.

EUR

The Euro was unable to hold modest gains against the U.S. dollar following the release of soft economic data from the bloc’s largest economy.  German PMI was revised lower to 44.1.  French manufacturing also shrank more than expected.  Overall Eurozone PMI registered at 47.5 versus and estimates of 47.6.  A reading of below 50 shows contraction.

GBP

Theresa May third attempt to pass her Brexit deal failed last week and now the U.K. faces an April 12 deadline to either agree to a deal or risk crashing out of the EU.  There will be a number of indicative votes taken later this evening.  Time is ticking away and the U.K. continues to flirt with a no-deal scenario which will keep any sterling gains in check.  Expect the results of the non-binding votes to hit the wire around 4:30 pm Eastern.

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