U.S. vehicles sales recovered in May after a disappointing April. Vehicles sales rose 17.4 million units, comfortably surpassing market expectations of 16.9 million units. On a sequential basis, vehicle sales rose 1.2 percent, the most rapid rise since June 2018.
The results came in mixed by top-selling auto brands. FCA and Toyota recorded a rise of 2 percent and 3.2 percent from a year ago, but Ford, GM, and Honda all experienced a contraction in sales in May.
Since the start of 2019, vehicle sales have rebounded up and down, exhibiting slightly of a seesaw pattern. Looking through the volatility, vehicle sales have averaged 16.9 million units, a slight stepdown from the 2018 average of 17.2 million units, but still a respectable level.
Rising interest rates have been a drag on auto sales recently, but with interest rates now steadying it might move more consumers back into the market, giving a boost to sales going forward, noted TD Economics in a research report. With the spectre of new tariffs on Mexico now on the table and given the tightly integrated nature of the auto industry between the U.S. and Mexico, consumers might pull-forward auto purchases to avoid falling victim to possible tariff impacts.
“Over the longer run, however, any tariff-induced price increases will add to the challenges faced by the auto sector”, added TD Economics.
At 14:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was slightly bearish at -58.3828 more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex
