Anna 
The euro (EUR) faced challenges against the strong dollar (USD) on Tuesday, with EUR/USD declining by 0.2% to 1.0702, despite positive data indicating higher-than-expected German retail sales in March.
German retail sales recorded a growth of 1.8% compared to the previous month, signaling a rebound in consumer spending, which is a positive indicator for the eurozone’s largest economy that narrowly avoided recession.
Investors are now eagerly awaiting the release of the latest inflation and growth figures for the entire eurozone later in the session.
Preliminary data suggests that eurozone consumer prices rose by 2.4% year-on-year in April, slightly above the European Central Bank’s (ECB) medium-term target of 2.0%. However, first-quarter economic growth for the region is expected to be modest, with just 0.1% growth anticipated, translating to an annualized growth rate of 0.2%.
The ECB has hinted at a potential deposit rate cut in June, but there remains uncertainty about whether further rate cuts will follow later in the year.
Meanwhile, the British pound (GBP) declined by 0.2% against the dollar, with GBP/USD trading at 1.2534, impacted by dollar strength. Sterling is on track to post a monthly decline of approximately 0.7% due to prevailing dollar dominance.
