American retail sales jumped up in March, up 1.4%, higher than the expected 1.3% increase. Consumers are increasing their consumption. They’re trying to load up on inventory ahead of possible increased costs that may result from the latest round of tariffs that were just recently announced by former President Donald Trump. Purchase activity is up at the highest rate since last December. They increased by 4.4% per year, whereas inflation decreased to 2.4% YOY.
Even the automotive sector, which boomed early in the pandemic, has seen modest growth. Sales were up only 0.5% and 0.7% in those two months. While the overall retail sales figures indicate a robust consumer response, the automotive industry’s slower pace highlights a cautious approach among consumers in specific sectors.
Consumer behavior is changing as well. This policy reversal coincides with a weaker US dollar and some signs of easing inflationary pressures in the UK. The EUR/USD exchange rate remains stable at 1.1350. This stability is due to a return of bearish sentiment towards the Greenback, which didn’t react to strong retail sales figures. While the dollar has been beat up, it has given some salvation to investors’ portfolios. Following a substantial drop of 9% in recent weeks, their spirits have rebounded recently.
Against the backdrop of mounting fears over a worsening US-China trade war, safe haven assets like gold have experienced massive inflows. The metal has hung onto its significant daily gains, remaining above $3,300. Indeed, earlier today it even broke above an all-time high close to $3,320. Investors are closely watching Federal Reserve Chairman Jerome Powell’s release of the Fed Board’s expected economic outlook. His remarks have the potential to seriously influence market sentiment.
The British pound to U.S. dollar exchange rate was volatile, lengthening its winning streak. After soaring to multi-month highs just below 1.3300, it ran into considerable selling pressure just above the 1.3250 level. The market backdrop today is one that is opaque, volatile, and mispriced. Retail investors need to work with CFDs & Spread Betting is tricky, with one of the available statistical data revealing that 77.37% of retail investor accounts lose money when trading these financial instruments.