Dollar consolidates ahead of US retail sales as rate hike bets stall – Forex News Preview



Retail sales will be in focus in the United States this week as the data out on Tuesday (12:30 GMT) is expected to show that American consumers have yet to be deterred by rising prices. Amid all the talk that the Federal Reserve’s aggressive tightening of monetary policy might tip the US economy into recession, a solid set of numbers could allay those fears, boosting the US dollar, which appears to be consolidating from last week’s 20-year high.

Fed’s rate hike path gets blurrier after the summer

Expectations about how many times the Fed will raise rates this year have taken a bit of a pause over the past 10 days or so, having surged at the start of the month. The Fed has signalled that it won’t go faster than 50 basis points – at least not in the June and July meetings. September is a different story, but if the early signs that inflation may have started to peak take further shape until then, rate hikes could slow to 25 bps increments in the autumn.

However, even in that ‘optimistic’ scenario, the tightening in financial conditions since the beginning of the year when the Fed was still buying bonds would be very sharp by historical standards. It shouldn’t be surprising therefore that even if Fed rate hike expectations are levelling off, the risk of a substantial slowdown in economic growth remains elevated.

US consumers are still spending

The US economy unexpectedly contracted in the first quarter, and although this was mainly down to technical factors such as declining inventories, a hit to consumption by the jump in the cost of living could drag on Q2 GDP. Two successive quarters of negative growth are technically defined as a recession – something that the Fed wants to avoid. However, persistently high inflation is even less desirable, not just by policymakers, but by the public as well.

For now, the world’s largest economy remains in relatively good shape, showing very few strains from the spike in energy prices and the broader turmoil caused by the war in Ukraine. In particular, the main driver of the American economy – the consumer – has kept spending throughout these latest economic and geopolitical storms.

Retail sales rose by 0.7% m/m in March and they are projected to have climbed even more strongly in April, by 0.9% m/m. One of the core measures, the control group of retail sales that’s used in GDP calculations is forecast to have risen by a healthy 0.5% m/m pace following March’s upwardly revised 0.7% gain.

Dollar is off its highs

The data could give the dollar a leg up as long as they don’t disappoint, while better-than-expected figures might revive bets of further hawkish tilts to come from the Fed. The greenback is currently testing the 129 level against the yen, easing from last week’s two-decade high of 131.34. The bulls are likely to meet resistance at 130 if they attempt to re-challenge that top. If successful, the 161.8% Fibonacci extension of the May downtrend at 133.71 would become the next upside target.

However, if retail sales aren’t as strong as is being predicted, dollar/yen could slip towards key support in the 127.50 area. A negative surprise cannot be ruled out as consumer surveys have been less robust than the hard data lately. The University of Michigan’s consumer sentiment index has been trending lower since the second half of 2021 and plummeted to depths not seen since October 2011 in the preliminary reading for May.

Is the housing market a concern?

Another risk for the dollar this week is the possibility of evidence that the Fed’s rate increases are starting to hurt the housing market. Building permits and housing starts for April are due on Wednesday, followed by existing home sales on Thursday. There are some signs that property demand is slowing as mortgage rates go up, so a further indication of this could see the dollar rally and rate hike speculation cooling again.

Dernières actualités

Dollar re-energized ahead of Fed minutes, NFP report amid recession jitters – Forex News Preview



Daily Market Comment – Dollar shoots higher, euro sinks as recession fears return, stocks reverse gains


Technical Analysis – EURGBP plummets below key support; bias worsens


Bitcoin rebounds above $20,000 despite intensifying systemic woes – Cryptocurrency News

Avertissement : Les entités de XM Group proposent à notre plateforme de trading en ligne un service d'exécution uniquement, autorisant une personne à consulter et/ou à utiliser le contenu disponible sur ou via le site internet, qui n'a pas pour but de modifier ou d'élargir cette situation. De tels accès et utilisation sont toujours soumis aux : (i) Conditions générales ; (ii) Avertissements sur les risques et (iii) Avertissement complet. Un tel contenu n'est par conséquent fourni que pour information générale. En particulier, sachez que les contenus de notre plateforme de trading en ligne ne sont ni une sollicitation ni une offre de participation à toute transaction sur les marchés financiers. Le trading sur les marchés financiers implique un niveau significatif de risques pour votre capital.

Tout le matériel publié dans notre Centre de trading en ligne est destiné à des fins de formation / d'information uniquement et ne contient pas – et ne doit pas être considéré comme contenant – des conseils et recommandations en matière de finance, de fiscalité des investissements ou de trading, ou un enregistrement de nos prix de trading ou une offre, une sollicitation, une transaction à propos de tout instrument financier ou bien des promotions financières non sollicitées à votre égard.

Tout contenu tiers, de même que le contenu préparé par XM, tels que les opinions, actualités, études, analyses, prix, autres informations ou liens vers des sites tiers contenus sur ce site internet sont fournis "tels quels", comme commentaires généraux sur le marché et ne constituent pas des conseils en investissement. Dans la mesure où tout contenu est considéré comme de la recherche en investissement, vous devez noter et accepter que le contenu n'a pas été conçu ni préparé conformément aux exigences légales visant à promouvoir l'indépendance de la recherche en investissement et, en tant que tel, il serait considéré comme une communication marketing selon les lois et réglementations applicables. Veuillez vous assurer que vous avez lu et compris notre Avis sur la recherche en investissement non indépendante et notre avertissement sur les risques concernant les informations susdites, qui peuvent consultés ici.

Nous utilisons des cookies pour vous donner la meilleure expérience possible de notre site internet. En savoir plus ou modifier vos paramètres de cookies.

Avertissement sur les risques : votre capital est à risque. Les produits à effet de levier ne sont pas recommandés pour tous. Veuillez consulter notre Divulgation des risques