Weak Retail Sales Data Raises Concerns Over U.S. Economic Growth

Investors are closely watching the Federal Reserve’s updated economic projections for clues on the future of interest rates. Any hawkish shift from policymakers could provide some support for the dollar, but recent economic data paints a mixed picture.

The U.S. Census Bureau reported that Retail Sales rose just 0.2% in February, falling short of the expected 0.7% increase. This follows a downward revision of January’s figures, which now show a -1.2% decline, previously estimated at -0.9%. Year-over-year growth slowed to 3.1%, down from a revised 3.9% in January.

These figures indicate slowing consumer spending, raising concerns over economic momentum. With inflation still a key factor in the Fed’s decision-making, the weaker retail sales data has intensified speculation over potential rate cuts, which could weigh on the USD by lowering yield expectations.

Geopolitical Risks and Trade Tariffs to Influence USD Outlook

Beyond economic data, geopolitical risks remain a major driver of USD performance. On Tuesday, Donald Trump and Vladimir Putin agreed to pause strikes on Ukraine’s energy infrastructure for 30 days, but Putin refused a broader ceasefire, keeping tensions elevated.

Meanwhile, Trump confirmed that new tariffs on steel, aluminum, and automobiles will take effect on April 2 with no exemptions. These trade restrictions could fuel market volatility and slow global economic growth, adding another layer of uncertainty to the USD’s trajectory.

With the Federal Reserve decision, trade tensions, and geopolitical risks in focus, investors will be watching closely for clearer direction in the coming days.