US dollar weakens as retail sales growth slows, trade tensions ease

From Yahoo Finance: 2025-05-14 20:54:00

The U.S. dollar slipped after a consumer health gauge showed retail spending slowed in April. Retail sales rose 0.1% last month, lower than expected after a 1.7% surge in March. The boost in March was due to purchases pulled forward ahead of Trump’s tariff announcement.

The producer price index for final demand dropped 0.5% last month, led by decreased demand for air travel and hotel accommodation. Weekly initial jobless claims remained at 229,000, with job openings becoming limited.

Trade tensions between the U.S. and China eased, leading markets to lower expectations for rate cuts from the Federal Reserve this year. The dollar index fell 0.11% to 100.89, with the euro up at $1.1176.

Fed officials are monitoring the impact of tariff announcements on prices and the economy before adjusting policy. Fed Chair Powell and Governor Barr expressed the need to reconsider key elements around jobs and inflation in monetary policy.

The dollar weakened against the Japanese yen and sterling strengthened after Britain’s economy grew more strongly than expected in early 2025. Major brokerages scaled back their U.S. recession forecasts and views of Fed policy easing.

Read more: US dollar dips as retail sales growth slows