The US dollar is weaker across the board after China reported no new COVID cases in Shanghai for a third day. US Retail Sales figures came in better than expected showing a resilient consumer. The euro traded over 1.05 after comments from an ECB official suggesting multiple rate increases this year. Oil trades over $115/bbl giving strength to the Canadian dollar.
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May 17, 2022
EUR/USD 1.0532 GBP/USD 1.2466 USD/CAD 1.2850 AUD/USD 0.7018 USD/JPY 129.73 USD/CNH 6.7320 USD/ILS 3.3504 USD/MXN 19.9396 USD/CHF 0.9937 USD/INR 77.5663 USD/BRL 4.9721 USD/SGD 1.3851 USD/DKK 7.0637 USD/SEK 9.9148 USD/NOK 9.6742
The dollar sold off versus most currencies as risk-on sentiment returned. April Retail Sales missed (+0.9%) the headline estimate (+1.0%) but the core number (+1.0%) beat forecast (+0.7%). Prior month Retail Sales were revised upward to +1.4% from +0.5%. The dollar rallied slightly on the Retail Sales figure then continued its selloff.GBP
Sterling trades higher this morning following improved UK jobs data. The UK economy added far more jobs than expected, while unemployment data and average earnings both beat forecasts. The UK will lay out its plan to amend post-Brexit trade. The government plans to introduce laws that would override the Northern Ireland protocol, should no progress be made over talks. The EU has stated it could suspend the entire agreement if the UK changes the protocol.EUR
The euro strengthened to 1.055 on overall US dollar weakness and comments from ECB Governing Council members supporting a 0.25% hike in July and possibly larger increases later this year. EU ambassadors are to hold more talks on the proposed Russian oil ban, an issue which has been particularly divisive. Macron names Elisabeth Borne as France’s second female PM.CAD
The Canadian dollar headed toward a third day of gains on overall US dollar weakness and a gain in the price of oil. West Texas Intermediate traded over $115/bbl until US April Retail Sales showed gas sales were a bit weaker than expected in April.ASIA/PACIFIC
The Chinese renminbi gained strength on hopes the lockdown in Shanghai may end soon after Beijing reported no new COVID infections for a third day. Authorities stated this was an important milestone before unwinding lockdown measures.
The Reserve Bank of New Zealand (RBNZ) could hike rates by 0.5% at each of its next three meetings to get on top of inflation.
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