The markets relinquished short-term gains on Friday following the soft retail sales and inflation data and should be poised to edge lower this afternoon as investors re-evaluate the likelihood of an interest rate increase in June. With an air of anxiety suffocating participants who seek risk, and soft economic data from the US and China weighing on sentiment, the “Sell in May and go away” strategy may become a popular choice.
The euro/U.S. dollar came under renewed selling pressure on Thursday, with prices descending toward 1.0852 after Mario Draghi swiftly quelled taper tantrum speculations with dovish inflation talks. Although the European Central Bank’s overall tone concerning the Eurozone’s economic recovery was slightly more optimistic, the monetary stance remained firmly dovish.