Prime Minister Theresa May is expected to meet senior Tory MPs later who are demanding she sets a date for her departure. While current rules of the 1922 Committee prevent MPs from formally challenging Mrs May, she has been asked to provide a ‘clear roadmap’. It is expected senior MPs will press the Prime Minister to set out a timetable regardless of whether her deal is approved by Parliament or not in early June. On Wednesday, US retail sales unexpectedly fell as households cut back on purchasing a range of goods, as well as cars.
This suggested that there could be a slowdown in US economic growth after a temporary boost from inventories and exports in Q1 2019.
Yesterday, the US hit Chinese telecoms Huawei with severe sanctions, heightening US-China trade tensions.
The US Commerce Department said that Huawei Technologies Co Ltd, as well as 70 affiliates, were to be added to its “Entity List”.
This move bans the companies from acquiring technology and components from US firms without government approval.
In a statement, US Commerce Secretary Wilbur Ross said that US President Donald Trump approved of the decision to “prevent American technology from being used by foreign owned entities in ways that potentially undermine US national security or foreign policy interests”.
Meanwhile, speaking at a US Senate Appropriations hearing, Treasury Secretary Steven Mnuchin stated US-China trade talks last week were constructive.
He said: “My expectation is that we will go to Beijing at some point in the near future to continue those discussions. There’s still a lot of work to do.”
This escalation of trade tensions left risk-appetite fragile and provided an upswing of support for the safe-haven US dollar.
Looking ahead to this afternoon, the US dollar could rise against Sterling following the release of the US Philadelphia Fed Manufacturing Survey.
If the Philly Fed rises above market expectations in May, the greenback could get a boost.
Meanwhile, on Friday the US dollar could slip back following the release of the US Michigan Consumer Sentiment Index, which is forecast to slip.