IForex Daily : May 14, 2014

 | May 14, 2015 03:50AM ET

On Wednesday, the dollar dropped to three-month lows against other major currencies, after data showed that retail sales in the U.S were lower than anticipated in April confirming worries regarding the health of the U.S economy. The Department of Commerce announced retail sales were unchanged, when market forecasts expected a 0.2% rise. Core retail sales, which exclude automobile sales, rose just 0.1%, below expectations for a 0.5% increase. The data raised speculation that the contraction of the 1st quarter growth was not entirely caused by the harsh winter and the port strikes in the U.S. April retail sales data had no weather distortions and therefore gave a clear picture of a slowdown in the U.S economy and a potential delay in the Federal Reserve rate hike. Following the data, stock markets were mixed while gold surged by approximately 2%. In the Euro zone front, GDP data showed a growth of 0.4% in the first quarter of 2015, right below of expectations for 0.5% growth but still the best result in four years. For today New Zealand is to release private sector data on manufacturing activity and official data on retail sales while the U.S. will announce producer prices and initial jobless claims.

EUR/USD

The euro rose to one-week highs against the dollar on Wednesday after weak U.S. retail sales data increased worries over second quarter growth in the U.S. after a slowdown in the first quarter. The data showed port strikes and bad weather were not the only problems that brought contraction in first-quarter growth. Weather conditions did not distort data therefore April retail sales indicated a weak start for second quarter growth causing the euro to jump back up crossing the 1.13 level and approaching 1.14 early on Thursday. For today, investors will be focusing on producer prices data and unemployment claims from the U.S.