Dollar rises on retail sales boost
Updated at 2:28 p.m. ET/ 1828 GMT
By Chuck Mikolajczak
NEW YORK, July 16 (Reuters) -The dollar rose on Tuesday, on track for a second straight daily gain, after a reading of retail sales proved to be firmer than expected, but was still soft enough to keep expectations intact for a rate cut from the Federal Reserve this year.
U.S. retail sales were unchanged in June, topping expectations of economists polled by Reuters for a decline of 0.3%, as a drop in receipts at auto dealerships was offset by strength elsewhere, a show of consumer resilience that boosts economic growth prospects for the second quarter.
"It isn't so much the overall number, but it's the ex-autos number, which was up considerably more than expected," said Joseph Trevisani, senior analyst at FX Street in New York.
"The auto sales are being depressed by interest rates so aside from that and of course the housing market, it looks like the consumer's still doing pretty well and we all know that's the base of the U.S. economy."
Other data showed import priceswere unchanged in June, as a rebound in the price of food was offset by lower energy prices, giving the Fed cushion to cut interest rates this year.
The dollar index =USD, which measures the greenback against a basket of currencies, gained 0.07% at 104.31, but was off its earlier high of 104.51. Against the Japanese yen JPY=, the dollar strengthened 0.28% at 158.46.
While markets only see a slim chance for a rate cut of at least 25 basis points (bps) by the Fed at its July meeting, a cut is being fully priced in for the September meeting, according to CME'sFedWatch Tool.
Sterling GBP= weakened 0.07% at $1.2957 ahead of British inflation data due on Wednesdaywhile the euro EUR= shed 0.03% at $1.0891 ahead of aEuropean Central Bank (ECB) policy meeting scheduled forThursday.
The ECB islargely expected to keep rates steady, putting the focus on comments from President Christine Lagarde for clues on the timing of the next rate cut following a 25 bps reduction in June.
On Monday, Federal Reserve Chair JeromePowell said the second quarter's three U.S. inflation readings "add somewhat to confidence" that the pace of price increases is returning to the Fed's targetin a sustainable way.
The Canadian dollar CAD= strengthened 0.03% versus the greenback at 1.37 per dollar, bouncing back from a drop of as much as 0.21%, after the country's slower-than-expectedrise in consumer prices in June bolstered expectations that yet another rate cut by the Bank of Canada may be in the offing next week.
Cryptocurrencies rose modestly following a rally in the prior session, along with shares of companies that could benefit from a Trump presidency, after an assassination bid on the Republican candidate boosted expectations that he would win the November election.
Bitcoin BTC= gained 1.58% at $64,780.28 whileethereum ETH= rose 0.83% at $3463.60.
World FX rates https://tmsnrt.rs/2RBWI5E
Monthly change in US core retail sales https://reut.rs/3y2vtM7
Annual change in US import and export prices https://reut.rs/3LrYYKm
Canada's inflation and interest rates https://reut.rs/3zG0WUF
Monthly change in US retail sales https://reut.rs/3LoLvTt
Reporting by Chuck Mikolajczak; Editing by Andrea Ricci and Nick Zieminski
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
