Peter Smith
On Tuesday, the EUR/USD pair moved to a lower price near 1.1755 because the US dollar became steady after a period of lower values. Due to stronger US economic data and less positive feelings about the Eurozone economy, the euro experienced downward movement.
The US Dollar Index (DXY) stays near 98.32 to measure the dollar against other major currencies. By reaching this level, the index shows that the dollar is more stable.
US data beats expectations
For the month of March, US retail sales increased by 1.7% and are higher than the predicted 1.4%. And this rate is faster than the revised 0.7% increase from February. In the report the figures are:
- Retail Sales ex-Autos: +1.9% MoM
- Control Group: +0.7%
- ADP Employment (4-week avg): 54.8K vs 39K prior
The stronger-than-expected release reinforced the dollar’s position, with markets reacting to the upside surprise in consumer spending, as also highlighted in US Retail Sales Beat Expectations in March Preliminary Data.
Fed outlook and policy comments
As markets look at the future of Federal Reserve policy, new data is available. If the figures continue, the central bank is likely to keep its current rules for a longer time.
At the same time Kevin Warsh provided comments while being a nominee for Fed Chair. He asked for a new way to manage inflation and a change in how the Fed operates - but he also spoke against the fact that the bank relies on forecasts for the distant future.
Geopolitical risks remain in focus
With pressure on EUR/USD, the pair is still near recent high prices because traders are careful. There is no large amount of selling at this time.
Market attention is on the relationship between the US besides Iran. When a ceasefire deadline approaches, people are unsure if talks will continue, because tensions exist in the Strait of Hormuz.
US President Donald Trump said that the US is in a position of power for negotiations. He said the military is ready if talks do not succeed. To the public it is not clear if more talks will happen because Iran is not but a confirmed participant.
In summary EUR/USD is at a lower level because the US data is strong and the dollar is firm - but the feelings of the market are also influenced by political uncertainty between nations.
Peter Smith
