US: Retail sales fell sharply as consumers became more cautious – CIBC

FXStreet Team FXStreet

Retail Sales dropped 1% in March in the US, a larger-than-expected contraction. Despite those numbers, analysts at CIBC still see the Federal Reserve raising rates in May, for the last time.

Key quotes:

“US retail sales fell sharply in March as consumers became more cautious, adding to other recent data releases that have signaled a deterioration in activity.”

“The Fed is looking for definitive signs of a cooling in activity and this print is a step in the right direction, but with sales volumes in the control group still 5.8% above their pre-pandemic trend level, this won't prevent a 25bp hike at the May FOMC."

“This data adds to signs of a deterioration in activity that will likely intensify in the second quarter, but the progress in cooling activity won't be enough to prevent a final 25bp Fed hike in May.”

Author

FXStreet Team

FXStreet

EUR/USD flat lines near 1.1800 as traders brace for US PPI release

The EUR/USD pair trades on a flat note near 1.1800 during the early Asian session on Friday. The pair steadies as softer Eurozone inflation offsets US tariff uncertainties. Traders await the preliminary reading of the Consumer Price Index from Germany on Friday for more clues about the pace of future policy easing. On the US front, the Producer Price Index report will be released.

GBP/USD threatens the 200-day SMA near 1.3440

GBP/USD rapidly leaves behind Wednesday’s strong advance, coming under heavy pressure and retesting the 1.3440 zone, where the critical 200-day SMA is located. Cable’s deep pullback follows the strong gains in the Greenback, while investors continue to pencil in a potential BoE rate cut in March.

Gold remains below $5,200 despite tariff jitters and geopolitical risks

Gold is seen consolidating in a range below the $5,200 mark during the Asian session on Friday amid mixed cues. Trade jitters, along with the risk of a potential US-Iran war, act as a tailwind for the safe-haven bullion. Meanwhile, the Fed's hawkish outlook keeps the US Dollar close to the monthly high and caps the non-yielding yellow metal. Nevertheless, the commodity remains on track to register gains for the fourth straight week, though the fundamental backdrop warrants some caution for bullish traders.