USD: moderate impulse reappearing – ing

This week’s data flow has been quite moderate for the Federal Reserve. After the soft April CPI, the PPI fell 0.5% intermensual, compared to the expectations of a 0.2% increase, with significant upward revisions for the March data. Regarding interannual levels, the general PPI decreased from 3.4% to 2.4%, while the basic PPI fell from 4% to 3.1%. Retail sales increased an intermensual 0.1%, slightly above the 0.0% consensus. However, the Control Group, which excludes volatile elements such as gasoline, cars and construction materials, showed a decrease of intermensual 0.2%, compared to the expectations of an increase of 0.3%, says the Currency Analyst of ING, Francesco Pesole.

The risks are still downward for the DXY

“The SWAP OIS rate 2 years of the USD has adjusted 10 basic points down from the peak of 3.8%, but it does not seem to be taking the moderate signals of the data to the letter, given the tariff distortion, and the valuation of a cut of the Fed before September remains below 50%. The ratio of short -term rates of the dollar has loosen up in the last two months In the market it means that a new moderate reevaluation could turn out to be the catalyst for the construction of new shorts in the dollar. “

“There are no first -level data publications in the US today. The beginnings of homes are expected to have increased in April, while import prices should have fallen due to the lowest oil prices. The surveys of the University of Michigan have a certain potential for foreign exchange impact, especially with regard to inflation expectations. The medium response for the expected change in prices 2.8% in December to 6.5% in April.

“This week’s price action suggests a weakening of the momentum so that the dollar closes its persistent risk premium. The strategic shorts in the dollar remain prevailing, and the support of 100.0 could be tested sooner rather than later.”