The euro jumped sharply yesterday on the news that the administration of US President Donald Trump postponed the final decision to impose import duties on cars and spare parts. The downward movement in the EURUSD pair, which was formed after weak data on the eurozone economy, was interrupted after the appearance of information about the postponement of the introduction of duties for about 6 months.
Let me remind you that the White House has repeatedly stated about the possible introduction of duties on cars that are produced by US trading partners. It is not only about China, but also about the eurozone and Japan. Representatives of the automotive industry in the United States also spoke about the postponement of the introduction of duties.
Weak data on the US economy also prevented the US dollar from continuing its upward trend against a number of world currencies.
According to a report by the US Department of Commerce, retail sales in April of this year fell by 0.2% compared with the previous month, while economists had expected retail sales to increase by 0.2%.
A weak retail sales report is a bad signal and will have a negative impact on the growth rate of the US economy in the 2nd quarter of this year.
Industrial production also weakened in April, which is another indication of a slowdown in economic growth due to trade conflicts that put special pressure on the manufacturing sector.
According to the report of the US Federal Reserve, industrial production in April fell by 0.5%, while economists had expected that it would remain unchanged.
The main pressure on the overall figure was the drop in the manufacturing production, which in the US fell by 0.5% in April this year compared to the previous month.
The data on the manufacturing index of the New York Fed was ignored by the market.
The report indicates that manufacturers in the area of responsibility of the Federal Reserve Bank of New York in May reported an increase in activity. The index in May rose to 17.8 points, while economists had expected the index in May to be 8 points.
The data on inventories of companies in the United States also did not impress traders. According to a report by the US Department of Commerce, inventories in March remained unchanged at $2.018 trillion. Economists also expected stocks to remain unchanged.
The report of the National Association of Home Builders (NAHB) showed that the housing market index in May of this year increased by 3 points compared with the previous month and amounted to 66 points. Economists had forecast an index of 64.
The material has been provided by InstaForex Company - www.instaforex.com