Dollar index surges after surprise rebound in U.S. retail sales
- US retail sales post surprise rebound in August
- US weekly jobless claims slightly higher than expected
NEW YORK, Sept. 16 (Reuters) – The dollar hit an almost three-week high against a basket of currencies on Thursday after data showed U.S. retail sales unexpectedly surged in August, allaying concerns about a sharp slowdown in economic growth.
The dollar index, which measures the US currency against six others, added to the gains after the report and rose 0.5% for the last time to 92.923. It reached its highest level since August 27.
Retail sales rose 0.7% last month, boosted in part by back-to-school purchases and child tax credit payments, while data for July was revised down.
A separate report showed that initial claims for unemployment benefits in the United States increased by 20,000 to seasonally adjusted 332,000 for the week ending September 11. Economists had forecast 330,000 claims for the last week. Read more
“If you look at the retail sales figure, it’s pretty constructive even with the revisions, so we see the dollar benefit, especially against funding currencies like the euro, Switzerland and the yen,” he said. North American official Bipan Rai said. forex strategy for CIBC Capital Markets in Toronto.
The news could bolster investor expectations for next week’s Federal Reserve policy meeting and how soon the U.S. central bank will start cutting stimulus.
“It’s as if all lingering concerns about the underlying economy… which have been wiped out a bit. As we head to the Fed next week, the evidence supports the idea that we’re going to get a signal from Fed cut at the meeting, ”he said.
On Tuesday, the dollar index fell to a one-week low at 92.321 after a weaker-than-expected inflation report. Its low for the month was 91,941 on September 3 when wage data disappointed.
Investors are seeking clarification on the outlook for both lower rates and interest rates at the Fed’s two-day policy meeting that ends next Wednesday.
The tapering usually lifts the dollar as it suggests that the Fed is one more step towards tightening monetary policy.
It also means that the central bank will buy less debt assets, thus reducing the amount of dollars in circulation, which in turn increases the value of the currency.
The dollar also gained 0.3% to 109.68 yen, after slipping to a six-week low of 109.110 in the previous session.
The euro fell 0.5% to $ 1.1758.
The Swiss franc also depreciated against the dollar and held steady at 0.9260 francs.
Elsewhere, the Australian dollar lost 0.7% to $ 0.7285.
Earlier, data showed the country’s unemployment rate unexpectedly fell to 4.5%, but the statistics bureau said the change reflected a drop in the participation rate rather than a strengthening in the labor market. . Read more
Currency auction price at 10:35 am (2:35 pm GMT)
Reporting by Caroline Valetkevitch Additional reporting by Ritvik Carvalho in London and Kevin Buckland in Tokyo Editing by Alexander Smith and Mark Potter
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