Dollar ends mixed, euro rebounds on Trump's auto tariffs delay

Market Review - 15/05/2019  23:33GMT  

Dollar ends mixed, euro rebounds on Trump's auto tariffs delay

The greenback pares intra-day losses and ended mixed on Wednesday after news reported that U.S. President Donald Trump is expected to delay auto tariffs up to six months in New York morning. The single currency rebounded broadly on the tariffs delay news whilst sterling tumbled to a near 3-month low on renewed U.K. cross-party Brexit concerns.  
  
Versus the Japanese yen, dollar went through a roller-coaster ride. Although the greenback edged higher to 109.70 at European open, price fewll to session lows of 109.16 due to intra-day cross-buying of yen as European traders bought the yen in reaction to release of weak Chinese data earlier. However, price erased its losses and staged a strong rebound to 109.68 as news of Trump's auto-tariffs delay boosted risk appetite.  
  
Reuters reported growth in China's industrial output slowed more than expected to 5.4 percent in April from a 4-1/2 year high in March, reinforcing views Beijing will have to roll out more stimulus measures as a trade war with the United States intensifies.     
Analysts polled by Reuters had forecast industrial output would grow 6.5%, slowing from an unexpectedly strong 8.5% in March.     
Retail sales rose 7.2% in April on-year, the slowest pace since May 2003, sharply down from March's 8.7% and missing a forecast rise of 8.6%.  
  
The single currency traded narrowly in Asia and recovered to 1.1217 in European morning before falling to session lows of 1.1178 at New York open. Price then jumped to 1.1225 in New York morning after U.S. President Trump planned to delay auto tariffs before swinging sideways in subdued New York afternoon.    
Reuters reported U.S. President Donald Trump is expected to delay a decision on tariffs on imported cars and parts by up to six months, three administration officials told Reuters.   
  
Although the British pound moved narrowly in Asia and gained to 1.2923 in European morning, cable met renewed selling there and later dropped to a near 3-month low at 1.2826 in New York morning on renewed Brexit concern after UK opposition Labour Party spokesman's comments before rebounding in tandem with euro to 1.2879, the pound last traded at 1.2841 near the close.  
Reuters then reported Britain's opposition Labour Party cannot support legislation to ratify Prime Minister Theresa May's Brexit deal if it has not reached a compromise agreement with the government, a spokesman for the party said on Wednesday.   
The government has been in talks with Labour for weeks in an attempt to find a way forward on Brexit. So far a deal has not been reached but the government has now said it plans to bring forward the Withdrawal Agreement Bill in early June.  
  
In other news, Reuters reported Italy is working to meet budget goals set by the government and recent fluctuations in the country's debt costs are unwarranted, Economy Minister Giovanni Tria said on Wednesday.   

On the data front, Reuters reported U.S. retail sales unexpectedly fell in April as households cut back on purchases of motor vehicles and a range of other goods, which could temper expectations for a sharp rebound in consumer spending after it slowed in the first quarter.   
The Commerce Department said on Wednesday retail sales slipped 0.2% last month. Data for March was revised slightly up to show retail sales surging 1.7%, the largest increase since September 2017, instead of the previously reported 1.6% jump.   
Economists polled by Reuters had forecast retail sales gaining 0.2% in April. Retail sales in April increased 3.1% from a year ago.  
  
Data to be released on Thursday :  
  
Japan corporate goods price, China house price index, Australia employment change, unemployment rate, Italy CPI, trade balance, EU trade balance, U.S. building permits, housing starts, initial jobless claims, Philadelphia Fed survey, and Canada manufacturing sales ADP employment change.