Daily Morning Report 14/05/2015
The euro rose to three-month highs against the broadly weaker dollar today after soft data on U.S. retail sales disappointed expectations for a rebound in second-quarter growth after a sharp slowdown in the first three months of the year.
The greenback weakened broadly after data yesterday showed that retail sales were flat in April and import prices were lower for a tenth straight month. The data underlined expectations that the Federal Reserve will delay hiking rates until later in the year, after recent figures showed that the U.S. economy expanded just 0.2% in the first quarter.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last down 0.45% to 93.32, the lowest level since January 22.
Elsewhere, Euro was boosted as German and U.S. bond yields rose to the highest level in five months as a broad-based selloff in global bond markets continued. German 10-year bund yields rose to 0.712 on Thursday, the highest since early December.
German bund yields act as benchmarks for European financial markets and higher yields push the euro higher against the dollar. Yields rise as prices fall.