IForex Daily : May 18, 2014

 | May 18, 2015 03:26AM ET

Last week, a series of soft economic data from the U.S. underlined weakness in the dollar causing it to drop against the euro and the yen on Friday while and reduced expectations that the Federal Reserve will move to an interest rate hike in the near future. The U.S. economic calendar showed on Friday, that U.S. industrial production fell for a fifth straight month posting a 0.3% drop in April and another report showed that U.S. consumer sentiment plunged to a seven month low this month. The University of Michigan's preliminary reading of the consumer sentiment index for May came in at 88.6, down from a final April reading of 95.9 and worse than forecasts for a reading of 96.0. Earlier in the week reports on retail sales and producer inflation also gave a pessimistic outlook for the second quarter after the first quarter disappointed investors. Investors focus for this week will be on Wednesday's Federal Reserve minutes for any possible hints on the timing of a rate increase. Friday's data on U.S. inflation will also be closely watched while the euro zone is to release data on private sector activity and China is to publish preliminary data on manufacturing activity.

EUR/USD

The euro continues to rise on a steady pace against the dollar on Friday, as investors took into consideration the positive growth data from Europe earlier in the week in comparison with weak U.S. growth. In addition On Friday, the University of Michigan reported that its Consumer Sentiment Index plunged to 88.6, far below estimates of a 93.5 reading. The weak data came after the U.S. Census Bureau reported little change in consumer spending throughout the nation while U.S. retail sales remained low. Investors' attention will be shifted towards the Fed minutes this Wednesday as they look for clues on the future monetary policy of the Fed. Last month, the FOMC removed all calendar references to the timing of its first interest rate hike in nearly a decade.