Watch the USD Tumble Today if Retail Sales for May Come Negative
Skerdian Meta • 1 min read
The US Dollar has been on a bullish trend for more than a year as the global economy slowed down considerably as a result of the trade war among other factors, while the US economy was holding up pretty well. The FED have been tightening the monetary policy pretty fast in the last few years, so the USD had all reasons to be bullish.
But in the last couple of months we have seen the US economy turn pretty weak as well. This month so far we have seen the ISM manufacturing PMI decline considerably while new non-farm jobs fell pretty low, with ADP non-farm employment at the lowest levels since 2011.
Last month, flash manufacturing and flash services fell close to contraction, while labour costs for Q1 declined by 0.9% as the report released last month showed. In April, retail sales turned negative again and declined by 0.2%. So, the economic situation is softening in the US as well, that’s why the USD turned bearish last week.
The decline has stopped in the last few days because the US economy is not in the same place as most major global economies which are still weakening pretty fast. But, if retail sales come negative again today, that would confirm the recent weakness of the US economy even more and would be the start of a negative trend for retail sales, since this would be the third decline in the last four month up to May. That would hurt the sentiment surrounding the USD considerably and the USD will likely resume the bearish trend of last week, so we will watch this report closely. You can follow our live coverage in the economic calendar section.