US dollar recovered early Monday from selling pressure following better US retail sales.

The US Dollar (USD) had a knee-jerk reaction at the opening of the US session on Monday, with US Retail Sales coming in stronger than expected on all fronts. The US dollar was under selling pressure this morning, as markets shifted away from safe haven assets after Iran stated that it does not intend to increase Middle Eastern tensions.

Traders return to the US dollar on the basis of exceptionalism.

Markets are now processing these variables to determine whether to send the US Dollar Index back to this year’s highs On the economic front, Business Inventories are the only data point remaining for this Monday. Meanwhile, New York Fed President John Williams told Bloomberg television that the recent US Consumer Price Index (CPI) was not a watershed moment for the Fed to reconsider its approach. This perspective could be important ahead of US Fed Chairman Jerome Powell’s speech on Tuesday.

Daily Market movers: Retail sales shine.
The majority of the US data has been disclosed.

In April, the NY Empire Manufacturing Index fell from -20.9 to -14.3, falling short of the expected -9.
The US Census Bureau said that retail sales increased from 0.6% to 0.7% in March, with February’s 0.6% corrected to 0.9%.
Retail Sales excluding transportation increased from 0.3% to 1.1%, with the 0.3% in February corrected to 0.6%.
At 14:00 GMT, the February Business Inventories report will be released. Markets predict a 0.3% gain over the previous month.
At 15:30 GMT, the US Treasury will auction a 3-month and 6-month bill.
Europe’s equities are higher, with the German Dax rising by more than 1%. US market futures are also trading higher, up more than 0.50% ahead of the US opening bell.
According to the CME Group’s FedWatch Tool, the odds of a Fed pause at the May meeting are 97.4%, while the chances of a rate drop are 2.6%. The likelihood of a September rate drop has risen and is currently greater than a Cut during the June meeting.
The benchmark 10-year US Treasury note trades around 4.56%, slightly higher than this week’s opening price of 4.53%.