US Dollar turns flat this Friday ahead of Consumer Sentiment data
LONDON (May 16) The US Dollar Index (DXY), which tracks the performance of the US Dollar (USD) against six major currencies, is trading flat around 100.80. The DXY is for now able to avoid a weekly loss while market participants are starting to raise questions over the stability of the Greenback. With United States (US) President Donald Trump flip-flopping on its tariff approach and how ill-conceived the first trade deals are, traders are starting to challenge the viability of the grand scheme from the Trump administration and its meaning towards the Greenback.
The US Dollar retreated on Thursday after a slew of economic data pointed that price pressures and consumer spending are cooling. The Producer Price Index (PPI) data unexpectedly showed prices fell in April compared with the previous month, while Retail Sales grew by a marginal 0.1% after March’s 1.5% surge.
On the geopolitical front, talks in Turkey about the Russia-Ukraine war failed to produce any significant outcome. Ukrainian President Volodymyr Zelenskyy met with Turkish President Recep Tayyip Erdoğan in Ankara, but soon left as Russian President Vladimir Putin did not come to the talks. US President Trump said a deal between the two nations will not be possible if Trump does not meet with Putin himself. Meanwhile, demand for more and harsher sanctions on Russia is starting to build, in order to force Russian President Putin to come to the negotiating table.
Daily digest market movers: Talks did not deliver
- Both Ukraine and Russian delegations entered in talks in Istanbul, but did not deliver any fruitful outcome with talks being concluded this Friday, Bloomberg reports.
- The US economic calendar meanwhile saw some data come out:
- April’s monthly Housing Starts fell to 1.361 million, coming from 1.37 million in March.
- April’s Import-Export Price Indexes came out as well. Export prices came in at 0.1% from 0.1% previously where -0.5% was expected. Import prices came in higher at 0.1%, missing the contraction of -0.4%, and up from the previous -0.4% contraction.
- At 14:00 GMT, the University of Michigan publishes its preliminary report for May:
- The Consumer Sentiment Index is seen edging up slightly to 53.4 from 52.2 in April's final reading.
- The 5-year inflation expectation is expected to remain stable at 4.4%.
- On equity markets, European indices soar on Friday, up just shy of 1%. US futures are lagging a touch but are also in the green, up by less than 0.50%.
- The CME FedWatch tool shows the chance of an interest rate cut by the Federal Reserve in June’s meeting at just 8.2%. Further ahead, the July 30 decision sees odds for rates being lower than current levels at 38.6%.
- The US 10-year yields trade around 4.39%, softening from its peak performance on early Thursday at 4.54%
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