Dollar's Dip: Retail Woes and Trade Tensions Shake Markets

The U.S. dollar weakened after economic data showed a slowdown in retail sales and heightened trade tensions. These factors, alongside Trump's tariff policies, impacted consumer sentiment and travel, leading to a reconsideration of Federal Reserve rate cut expectations. Despite easing trade tensions, economic uncertainty persists.

The U.S. dollar dipped on Thursday, as recent economic data revealed a slowdown in consumer spending and ongoing trade tensions. The Commerce Department reported a minimal 0.1% rise in April retail sales following a notable 1.7% increase in March, driven partly by pre-tariff purchases.

Despite a temporary easing of trade tensions between the U.S. and China, concerns remain as President Trump's protectionist policies and immigration stance impacted sectors like tourism. Initial jobless claims remained steady, but job openings were limited.

The Federal Reserve is reassessing its rate cut plans amid these economic indicators, with market expectations now shifting away from a July cut. However, Fed officials express the need for more data to gauge tariff effects on the broader economy.

(With inputs from agencies.)