Alexander Kuptsikevich
FxPro Financial Services Limited
US retail sales fell 0.9% in May, returning to the level of three months ago. Economists on average had forecast a 0.7% contraction, following a 0.1% decline earlier and a 1.5% jump in March. Auto sales and lower fuel prices drive volatility. Still, there is also a worrying sign in the fall in household goods sales, where a decline in sales typically reflects Americans' shift to savings and has been associated with recessions in recent years.
A separate Fed report noted a 0.2% decline in the industrial production index in May. The index has retreated 0.4% from its February peak, forming a reversal from the 104 area (2017=100), roughly the same area where production peaked in 2019 and 2014. Slightly lower, around 102.3, was the peak in December 2007, which makes this area a kind of ceiling for the level of industrial production, setting up another reversal of the downward trend. Fundamental factors in the form of tariff wars and a tight monetary policy strengthen the arguments in favour of a short-term decline. However, today the ball is in the court of the Fed, which will present its comments and forecasts on monetary policy and the economy in the evening. Powell's softening tone can put pressure on the dollar and support the economy in the coming quarters. The desire to "wait and see" can accelerate the correction in manufacturing and retail sales in the United States.
Trade Responsibly. CFDs and Spread Betting are complex instruments and come with a high risk of losing money rapidly due to leverage. 77.37% of retail investor accounts lose money when trading CFDs and Spread Betting with this provider. The Analysts' opinions are for informational purposes only and should not be considered as a recommendation or trading advice.
Recommended Content
Editors’ Picks
NZD/USD picks up fresh bids above 0.6000 after RBNZ's expected hold
NZD/USD catches minor bids above 0.6000 in Wednesday's Asian trading, helped by the Reserve Bank of New Zealand's (RBNZ) expected interest rate-on hold decision following the July meeting. The Kiwi central bank opted to stand pat amid heightened global uncertainty over Trump's protectionism.
AUD/USD regains traction above 0.6500 after mixed Chinese inflation data
AUD/USD regains traction above 0.6500 early Wednesday, despite the mixed Chinese inflation data. The pair looks to resume the RBA's surprise on-hold decision-led uptick while Trump's planned tariffs on Copper could act as a headwind for the resources-linked Aussie. All eyes remain on trade talks and Fed Minutes.
Gold: More downside in the offing as tariff talks, Fed Minutes loom
Gold price is battling $3,300, licking its wounds early Wednesday. Traders refrain from placing fresh bets on the bright metal, awaiting fresh trade updates and the Minutes of the US Federal Reserve June policy meeting for fresh directives.
Cronos surges 20% on inclusion in Trump Media's Blue Chip ETF
Crypto.com's native token Cronos saw double-digit gains on Tuesday following Trump Media and Technology Group's filing with the Securities & Exchange Commission to launch a Blue Chip exchange-traded fund.
New US tariffs target Asia, but some countries stand to gain
President Trump’s new tariffs are higher than expected for most Asian economies. Moreover, most countries will face additional tariff rates on transshipments. The new announcements are silent on Singapore, India and the Philippines, which might stand to benefit from tariff concessions if negotiations progress favourably.
Best Brokers for EUR/USD Trading
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.