Did it snow in April?
Maybe it snowed in Alaska but it the idea that weather and a port strike was the only thing hurting the US economy in Q1 is getting tougher to believe. Lower gas prices were supposed to fuel a revival in the US consumer but a weak retail sales report is raising new questions.
The US dollar is down across the board after the data. It's given the euro fresh legs for a climb above 1.1300, taking out yesterday's high at 1.1280 and Thursday's high of 1.1289.
It's a similar story elsewhere with the US dollar down 70 pips against the pound and yen. The commodity currencies are also 30-40 pips higher against the dollar. AUD/USD broke above the April highs and is at the best level since January at 0.8090.
AUDUSD daily
What next?
This one is going to sting the US dollar for a few days. There isn't any tier-1 US economic data for the rest of the week and releases like the Empire Fed, factory orders and U Mich sentiment aren't really the types of indicators to turn around a market.
The moves are relatively large already but I think the direction of the market will last. In particular, the commodity currencies are beginning to look better.
The US dollar trade is starting to feel way too crowded.
