Dollar regains traction after upbeat U.S. retail sales

Market Review - 19/04/2019  01:27GMT  

Dollar regains traction after upbeat U.S. retail sales

The greenback ended broadly higher against majority of its peers on Thursday except versus Japanese yen on strong U.S. retail sales data. The single currency fell sharply in European morning and continued remain under pressure in New York on weak France and German manufacturing PMI data.  
  
Reuters reported U.S. retail sales increased by the most in 1-1/2 years in March as households boosted purchases of motor vehicles and a range of other goods, the latest indication that economic growth picked up in the first quarter after a false start.   
  
The Commerce Department said on Thursday retail sales surged 1.6 percent last month. That was the biggest increase since September 2017 and followed an unrevised 0.2 percent drop in February.   
  
Economists polled by Reuters had forecast retail sales would accelerate 0.9 percent in March. Retail sales in March advanced 3.6 percent from a year ago.   
  
Versus the Japanese yen, although dollar remained under pressure in Asia and fell to +session lows at 111.77+ in European morning due to retreat in U.S. Treasury yields and weakness in Asian stocks, price rebounded to 112.02 at New York open on robust U.S. retail sales data before moving broadly sideways in New York's afternoon session.  
  
Although the single currency rebounded to 1.1304 in Asia, price met renewed selling and swiftly fell to 1.1244 in European morning on weak France, German, and euro zone manufacturing PMI data and then ratcheted lower to session lows at 1.1227 in New York on robust U.S. retail sales data before stabilising. ahead of the close.  
  
German manufacturing sector shrank for the fourth month in a row, however, although the contraction was slightly smaller than in March.   
  
Activity in the sector was measured at 44.5, well below the 50.0 mark separating growth from contraction but above than the 44.1 reading recorded last month. It was the first month-on-month rise in nine months.  
  
Reuters reported the downturn was again led by the bloc's manufacturing industry. While its PMI rose to 47.8 from March's 47.5, it spent its third consecutive month below the break-even mark and was below a median forecast for 47.9.   
  
The British pound recovered to 1.3052 in Asia before renewed selling emerged and fell in tandem with euro to 1.3010 in European morning. Despite rebounding to 1.3034 on upbeat UK retail sales data, cable fell to 1.2994 at New York open on usd's strength and then ratcheted lower to session lows at 1.2980.  
  
Reuters reported in monthly terms, UK retail sales jumped by 1.1 percent, defying the median forecast of a fall of 0.3 percent in the Reuters poll.   
  
In other news, Reuters reported there has been new progress in negotiating the text of a Sino-U.S. trade deal, but work remains to be done, China's commerce ministry spokesman, Gao Feng, told a regular news briefing on Thursday.   
  
On the data front, Reuters reported the number of Americans filing applications for unemployment benefits fell to more than a 49-1/2-year low last week, pointing to sustained strength in the economy.   
  
Initial claims for state unemployment benefits dropped 5,000 to a seasonally adjusted 192,000 for the week ended April 13, the lowest level since September 1969, the Labor Department said on Thursday. Data for the prior week was revised to show 1,000 more applications received than previously reported.   
  
Claims have now declined for five straight weeks. Economists polled by Reuters had forecast claims would rise to 205,000 in the latest week.   
  
Data to be released this week :  
  
New Zealand market holiday, Australia market holiday, Swiss market holiday, UK market holiday, Germany market holiday, Italy market holiday, France market holiday, U.S. Chicago national activity index, existing home sales on Monday.  
  
U.S. building permits, redbook, monthly home price, new home sales, Richmond Fed manufacturing index, Canada wholesale sales, and EU consumer confidence on Tuesday.  
  
Australia CPI, France business climate, Germany Ifo business climate, Ifo current conditions, Ifo expectations, Italy trade balance, Swiss investor sentiment, UK PSNB, PSNCR, U.S. MBA mortgage application and Canada Bank of Canada interest rate decision on Wednesday.  
  
Australia market holiday, New Zealand market holiday, Japan Bank of Japan interest rate decision, UK CBI trends survey, U.S. durable goods, durables ex-transport, durables ex-defense, initial jobless claims, KC Fed manufacturing index, and Canada average weekly earnings on Thursday.  
  
New Zealand imports, trade balance, exports, Japan Tokyo CPI, unemployment rate, industrial output, retail sales, Australia PPI, export prices, import prices, France consumer confidence, Swiss KOF indicator, UK CBI distributive trades, and U.S. GDP, PCE, University of Michigan sentiment on Friday.