The US Dollar is still underpinned by the current dovish market sentiment toward holding assets and taking risks in the recent 2 days. The US equities markets have been suffering a profit taken wave dragged it down pushing the European stock markets and the Asian stock markets down after the recent optimistic rally which contained the market sentiment in the recent  weeks since the second week of March.

The market is waiting for a the results of this test after the rally and how much the equity market will be solid in the face of this profit taken holding these recent gains believing in a recovery can be this year.

Yesterday, April US retail sales figures were encouraging to take profit at this point as they have put doubts about the pace of consuming which can lead the demand and the growth back again.

US retail sales of April have slumped by .5% m/m excluding the auto sales and by .4% broadly. We wait tomorrow by god's will, for the release of US Michigan preliminary reading of May which has improved in April to 65.1. The market was cheered by the recent releases of April consuming figure from the release of US Consuming confidence which went up to 29.5 from 26 in March and this was better than the market expectations of 39.2 and further worries about the consuming can hurt the market building confidence.

We wait tomorrow too for the release of US CPI which is expected to shrink yearly in April by another .4% like March and the core figure is also expected to stand as March at 1.8% even the core CPI is expected to be up by just .2%.

Best wishes

FX Consultant

Walid Salah El Din
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