Both retail sales and PPI numbers came in lower than expected in April, seeing a modest decline on the dollar yesterday. However, overall there was no clear direction on dollar pairs as markets are attempting to digest the moves and news flows from earlier this week.
Monday began with a demand for the dollar after both China and the US reduced tariffs reciprocally, but this was countered by concerns that the US could be considering policies to weaken the dollar in tariff talks – although this has since been refuted.
The pound remained well supported against G10 currencies following the better than expected GDP numbers from earlier in the day.
*Daily move - against G10 rates at 7:00 am, 16.05.25
** Indicative rates - interbank rates at 7:00 am, 16.05.25
Quiet end to the week with no big data point catalysts expected for the day ahead. The dollar continues to consolidate, as exuberance from earlier in the week regarding the US and China has faded. Markets have another factor to deal with now, mainly whether the Trump administration is indeed looking for a weaker dollar policy, despite refuting this on several occasions. We may well have to wait until next week for any big movements in the FX space unfortunately.
On the positive side GBPEUR is trading at a one-month high, retracing the majority of the losses suffered from Trump's announcements.
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