- Retail Sales in the US rose more than expected in March.
- The US Dollar Index stays deep in negative territory below 100.00.
Retail Sales in the United States (US) rose by 1.4% in March to $734.9 billion, the US Census Bureau announced on Wednesday. This reading followed the 0.2% increase recorded in February and came in slightly better than the market expectation for an increase 1.3%. On a yearly basis, Retail Sales were up 4.6%.
"Total sales for the January 2025 through March 2025 period were up 4.1% from the same period," the press release read. "Retail trade sales were up 1.4% from February 2025, and up 4.6% from last year."
Market reaction
The US Dollar Index struggles to gain traction despite the upbeat data and was last seen losing 0.42% on the day at 99.67.
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
Gold climbs to new all-time high above $3,400
Gold extends its uptrend and trades at a new all-time high above $3,400 on Monday. Concerns over US-China trade war escalation and the Fed’s independence smash the US Dollar to three-year troughs, fuelling XAU/USD's rally.
EUR/USD clings to strong gains above 1.1500 on persistent USD weakness
EUR/USD gains more than 1% on the day and trades at its highest level since November 2021 above 1.1500. The relentless US Dollar selling helps the pair push higher as fears over a US economic recession and the Federal Reserve’s autonomy grow.
GBP/USD tests 1.3400 as USD selloff continues
GBP/USD continues its winning streak, testing 1.3400 on Monday. The extended US Dollar weakness, amid US-Sino trade war-led recession fears and heightened threat to the Fed's independence, underpin the pair following the long weekend.
How to make sense of crypto recovery – Is it a buy or fakeout
Bitcoin (BTC), Ethereum (ETH) and XRP, the top three cryptocurrencies by market capitalization, extend their last week’s recovery on Monday, even as trader sentiment is hurt by the US President Donald Trump’s tariff policy and announcements.
Five fundamentals for the week: Traders confront the trade war, important surveys, key Fed speech Premium
Will the US strike a trade deal with Japan? That would be positive progress. However, recent developments are not that positive, and there's only one certainty: headlines will dominate markets. Fresh US economic data is also of interest.
The Best brokers to trade EUR/USD
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.