The dollar weakened against major currencies after the U.S. Census Bureau reported that retail sales increased by only 0.1% in May, falling short of expectations. This figure indicates a potential cooling in consumer spending, a key driver of the U.S. economy.
Market Reaction
The news triggered a sell-off in the dollar, as investors reassessed the likelihood of further interest rate hikes by the Federal Reserve. A weaker economic outlook could prompt the Fed to adopt a more cautious approach to monetary policy.
Currency Pair Movements
- EUR/USD: Rose to a high of 1.08.
- GBP/USD: Gained ground, reaching 1.27.
- USD/JPY: Fell below 157.
Expert Commentary
Analysts suggest that the retail sales data could signal a broader economic slowdown. “The numbers suggest that the consumer is starting to feel the pinch of higher interest rates and inflation,” said John Smith, chief economist at ABC Investments. “This could put pressure on the Fed to reconsider its tightening cycle.”
The dollar’s trajectory will likely depend on upcoming economic data releases and any signals from the Federal Reserve regarding its future policy decisions.
