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US dollar bounces following strong home sales and despite weaker retail sales

USD - United States Dollar

The US dollar index bounced 0.17 percent despite retail sales unexpectedly falling in April as motor vehicle purchases slumped. Retail sales came in below expectations at -0.2 percent last month versus the +0.2 percent expected. It initially seemed that a healthy job market had made consumers more eager to spend in ways that boost overall economic growth, but retail sales numbers are contradictory. However, the nation’s home-builders are reporting a rebound in sales, and that is making them more optimistic about the housing market.

Regarding the US-China trade war, analysts warned that China might sell US treasuries to bolster the Yuan and Trump asked the Fed for some stimulus to match PBOC policy and push US growth to 5 percent last night. On Twitter, Trump said that the government would come to the aid of American farmers hurt by Beijing’s retaliatory tariffs. He also stated that “when the time is right, we will make a deal with China." He added that he believes a deal can “absolutely happen.”

Key Movers

The Australian dollar fell to its lowest level in three months, trading at 0.6915 at four in the morning as bleak data from China heightened worries about the global economy, while anemic domestic wage growth figures also dragged. For instance, industrial output and retail sales decelerate more than economists forecasted.

The North American equity futures and European shares have plummeted as the weak data from China activated global growth concerns. Additionally, regarding Brexit, it seems that Prime Minister Theresa May is going to have another Brexit showdown and she is promising to bring her deal back to Parliament at the start of June.

Expected Ranges

USD/CAD: 1.3375 - 1.3515 ▲

EUR/USD: 1.1207 - 1.1247 ▲

GBP/USD: 1.2842 - 1.2937 ▼

AUD/USD: 0.6917 - 0.6959 ▼

NZD/USD: 0.6538 - 0.6577 ▼