Daily Afternoon Report 15.05.2018

The U.S. dollar rose to the best levels of the day on Tuesday, nearing last week’s four-and-a-half month highs after a slightly stronger than expected U.S. retail sales report.

The Commerce Department reported that while retail sales rose 0.3% in April the prior months figure was revised up to 0.8% from a previously reported 0.6%.

Core retail sales rose 0.3% last month, but April’s figure was revised up to 0.4%, from 0.2% previously.

The report indicated that consumer spending is on track to rebound after a soft patch in the first quarter.

The data helped push U.S. Treasury yields higher, with the yield on 10-year U.S. Treasury notes hitting 3.047%, the most since early 2014 on rising inflation expectations.

The dollar climbed to three-month highs against the yen, with USDJPY up 0.51% to 110.21.

The euro fell to near one-week lows, with EURUSD dropping 0.68% to 1.1846.

Earlier Tuesday, a report confirmed that growth in the euro area economy slowed slightly in the first quarter, underlining the European Central Bank’s caution about scaling back stimulus.

Elsewhere, the pound was also lower against the dollar, with GBPUSD losing 0.55% to trade at 1.3481, within close reach of Thursday’s four-month trough of 1.3459.

The latest UK jobs report earlier Tuesday did little to boost expectations for a summer rate hike by the Bank of England, showing that unemployment remained steady while wage growth picked up only modestly in the three months to April.

The Australian dollar was the largest decliner against its U.S. counterpart among the major currencies, with AUDUSD last at 0.7465, off 0.82% for the day.

Meanwhile, NZDUSD was down 0.55% to 0.6873, a level not seen since mid-December.