Forexlive European FX news wrap: Hot UK retail sales, weak USD, Trump threatens Apple

• Trump threatens tariffs on Apple if products not made in US

• ECB’s Lane: Confident services inflation will come down
• How have interest rates expectations changed after this week’s data?
• Bulgaria Advances Toward Euro Adoption
• ECB Q1 2025 negotiated wage indicator +2.38% vs +4.12% in Q4 2024
• ECB’s Rehn: June cut ‘appropriate’ if data confirm stabilisation of inflation
• France May consumer confidence 88 vs 93 expected
• Germany Q1 final GDP 0.4% vs 0.2% q/q expected
• UK April retail sales +1.2% vs +0.2% m/m expected
• ECB’s Stournaras: I see a June rate cut and then pause
• FX option expiries for 23 May 10am New York cut
• Trump pushes EU to cut tariffs or face extra duties – FT

It’s been a pretty boring session in terms of newsflow. The UK retail sales report was the only highlight. The data beat expectations by a huge margin with good weather cited as the main reason. Nonetheless, there’s been a strong positive trend in retail sales for several months.

In the markets, the most notable mover has been the US Dollar which extended the overnight losses. There was no catalyst since yesterday’s strong US PMIs, but the fact that the market has already repriced interest rates expectations in line with the Fed’s baseline for 2025 gives the greenback little support.

We will need more to trim the rate cuts bets further and give the USD a boost. That could come with the data in June when we get ISM PMIs, NFP and CPI before the FOMC Policy Decision.

For now, we could either range here or see more losses for the greenback. For today, we are already at the daily average range limit, so there shouldn’t be much follow through in the American session and chances of a pullback are higher.

Late in the session, Trump posted on Truth Social that he would impose 25% tariffs on Apple if the iPhones were not made in the US. That saw the AAPL stock dropping more than 3% in pre-market trading.

This article was written by Giuseppe Dellamotta at www.forexlive.com.