Daily Afternoon Report 18/05/2015
The dollar held gains against a basket of other major currencies in subdued trade today, as it recovered from recent losses although Friday’s downbeat U.S. economic reports continued to weigh on the greenback. The dollar remained under pressure after data on Friday showed that U.S. industrial production fell for the fifth straight month in April and another report showed that U.S. consumer sentiment deteriorated to a seven-month low this month. The reports came after disappointing data on retail sales and producer inflation earlier in the week and dampened hopes for a second-quarter rebound after a sharp slowdown in growth in the first three months of the year. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.44% to 93.70.
Elsewhere, EURUSD slid 0.50% amid fresh concerns over the prospects of a Greek default. Athens is scrambling to reach a cash-for-reform deal with its international lenders in time to avoid a cash crunch. Over the weekend, a leaked memo from the International Monetary Fund showed that there is “no possibility” that Athens can meet a loan repayment due on June 5 without a deal to unlock outstanding bailout funds. Last week Greece came close to defaulting on a €750 million IMF repayment, which it ultimately made by tapping emergency reserves in its holding account at the IMF.
Also, data earlier showed that Japan’s core machinery orders rose 2.9% in March, the first increase in two months. However, the report also indicated that core orders will fall in the current quarter, adding to concerns over the outlook for the recovery.
In Switzerland, data showed that retail sales declined at an annualized rate of 2.8% in March, compared to expectations for a 2.0% fall. February’s figure was revised to a 3.1% drop from a previously estimated 2.7% slide.
The Australian Bureau of Statistics reported today that new motor vehicle sales fell 1.5% last month, after a 0.5% rise in March.