020 7898 0500A poor close to the week for the dollar, with US retail sales falling below forecast at 0.4%. Forecasts suggested there would have been a solid increase in April due to a pickup in car sales, which were weak in Q1.
Nevertheless, the prospect of further rate hikes and shrinking of the Federal Reserve balance sheet, i.e. minimising quantitative easing, are supporting the dollar. Some reports suggest that markets have not yet fully priced in these factors, so there could be further strength here.
Looking to the week ahead, we’ll be hearing about the industrial production figures, which are forecast to have improved over the month of April. We’ll also be finding out how the US housing market is performing.
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