The U.S. dollar lost ground across major currency pairs after official data showed American retail sales rose just 0.1% in May, missing the 0.3% consensus forecast and slowing sharply from the prior month's 0.7% increase. The softer consumer spending figure, released by the U.S. Census Bureau, reinforced market expectations that the Federal Reserve may need to begin easing monetary policy sooner than previously thought.
The Swiss franc was among the beneficiaries, with USD/CHF slipping to around 0.8850 during European trading. The pair had earlier touched its weakest level in more than a month, but safe-haven demand and dollar softness helped the franc recover. Futures markets now price in roughly a 70% chance of a Fed rate cut by September, according to CME FedWatch. The Swiss National Bank has kept its policy rate at 1.5% since March and remains watchful of excessive franc strength, with its next policy meeting scheduled for June 20.
Meanwhile, the Australian dollar extended gains, with AUD/USD trading near 0.7050, up about 0.4% on the day. Traders are eyeing the psychological 0.7100 resistance level, with additional resistance at 0.7070 and support at 0.7020 and 0.6980. The Reserve Bank of Australia's relatively hawkish commentary, firm commodity prices, and China's stimulus measures have provided additional support for the Aussie.
For digital asset markets, the macro backdrop is being closely watched. A weaker U.S. dollar and rising expectations of Federal Reserve rate cuts tend to improve liquidity conditions and risk appetite, which can offer support for cryptocurrencies broadly. However, the direct impact remains tied to upcoming Fed signals and whether consumer spending weakness becomes a sustained trend.
Key levels: USD/CHF resistance at 0.8900, support at 0.8800; AUD/USD resistance at 0.7070 and 0.7100, support at 0.7020 and 0.6980.
