Rise in the US Dollar Index
The US dollar has been gaining against its peers in recent trading sessions due to a surge in crude prices and the release of positive economic data. The US Dollar Index increased by almost 2% since the beginning of May. A pullback in major currencies included in the US Dollar Index basket also contributed to the sentiment.
Increased retail sales growth in the US
Currently, the major question is whether the reversal in the US dollar will continue. Expectations related to the Fed’s stance in the upcoming FOMC (Federal Open Market Committee) will impact investors who are are less bullish on prospects of a rate hike. The non-farm payroll numbers are important in determining the Fed’s stance. However, in the current scenario, consumer spending has become a more critical parameter for US policymakers. On May 13, retail sales increased by 3% on an annual basis in April—compared to a 1.7% rise in the previous month. On a monthly basis, retail sales grew by 1.3% in April—compared to a contraction of 0.3% in March.