US dollar strengthens ahead of Fed rate cut move
Updates prices throughout, adds background on other currencies
By Chibuike Oguh
NEW YORK, Sept 17 (Reuters) -The U.S. dollar strengthened against most major currencies on Tuesday following better-than-expected retail sales data that seemed to support a less aggressive stance by the Federal Reserve when it delivers a much expected interest rate cut.
Commerce Department data showed on Tuesday that U.S. retail sales unexpectedly rose 0.1% in August, suggesting that the economy remained on solid footing through much of the third quarter.
The Fed's Federal Open Market Committee will give its interest rate decision at the conclusion of its meeting on Wednesday after which Chair Jerome Powell will hold a press conference.
The dollar index =USD, which measures the greenback against a basket of currencies including the yen and the euro, gained 0.22%at 100.93.
Against the yen JPY=EBS, the dollar rose 0.87% to 141.775 after weakening slightly following the retail sales data.
The euro EUR=EBS hovered around $1.111550, not far from the year's high of $1.1201.
"We obviously are waiting for the FOMC. That's probably the overarching theme and we've had some moves with economic data that have come out today," said Axel Merk, president and chief investment officer at Merk Investments in Pal Alto, California.
Fed funds futures 0#FF: have rallied to push the chance of a 50 basis point rate cut to 61%, against 30% a week ago. The odds have narrowed sharply after media reports revived the prospect of a more aggressive easing. FEDWATCH
Other economic data on Wednesday appeared to provide support for the Fed to be less aggressive in cutting rates. U.S. business inventories, a key component of gross domestic product, posted a better-than-expected gain of 0.3% in July while factory output rebounded in August.
"Overall, the market is pricing in numerous rate cuts over the next several months and there are those voices that suggest that maybe the market has gotten ahead of itself," Merk added.
The Bank of Japan is expected to keep policy steady on Friday but signal that further interest rate hikes are coming, perhaps turning the next meeting in October into a live one.
The Bank of England is also expected to retain interest rates at 5% when it meets on Thursday, although markets have priced in a nearly 36% chance of another cut. 0#BOEWATCH
Sterling GBP=D3 - the best performing G10 currency this year with a 3.43% rise on the dollar - has led the charge against the dollar thanks to signs of resilience in Britain's economy and stickiness in inflation. It was last down 0.39% at $1.31635.
Chinese markets are closed for the Mid-Autumn Festival break until Wednesday, though the yuan CNH=D3 was up 0.15% at 7.1082 in offshore trade.
The Canadian dollar CAD=D3 was up 0.07% at $1.35970. The Australian AUD=D3 and New Zealand NZD=D3 dollars bought $0.67520 and $0.61840 respectively.
Currency bid prices at 17 September 04:19 p.m. GMT | |||||||
Description | RIC | Last | U.S. Close Previous Session | Pct Change | YTD Pct | High Bid | Low Bid |
Dollar index | =USD | 100.94 | 100.7 | 0.25% | -0.42% | 100.95 | 100.56 |
Euro/Dollar | EUR=EBS | 1.1116 | 1.1133 | -0.15% | 0.71% | $1.1146 | $1.1112 |
Dollar/Yen | JPY=D3 | 141.84 | 140.59 | 0.79% | 0.46% | 141.84 | 140.36 |
Euro/Yen | EURJPY= | 1.1116 | 156.53 | 0.73% | 1.31% | 157.87 | 156.06 |
Dollar/Swiss | CHF=EBS | 0.8467 | 0.8449 | 0.22% | 0.61% | 0.8478 | 0.843 |
Sterling/Dollar | GBP=D3 | 1.3154 | 1.3216 | -0.44% | 3.39% | $1.3229 | $1.3154 |
Dollar/Canadian | CAD=D3 | 1.3599 | 1.3587 | 0.1% | 2.6% | 1.3617 | 1.3581 |
Aussie/Dollar | AUD=D3 | 0.675 | 0.6752 | 0.01% | -0.96% | $0.6769 | $0.6742 |
Euro/Swiss | EURCHF= | 0.9412 | 0.9403 | 0.1% | 1.35% | 0.9422 | 0.9383 |
Euro/Sterling | EURGBP= | 0.8449 | 0.8423 | 0.31% | -2.53% | 0.845 | 0.8419 |
NZ Dollar/Dollar | NZD=D3 | 0.6178 | 0.6201 | -0.34% | -2.2% | $0.6211 | 0.6179 |
Dollar/Norway | NOK= | 10.5976 | 10.5865 | 0.11% | 4.57% | 10.623 | 10.5601 |
Euro/Norway | EURNOK= | 11.781 | 11.786 | -0.04% | 4.96% | 11.8099 | 11.7553 |
Dollar/Sweden | SEK= | 10.1921 | 10.1687 | 0.23% | 1.24% | 10.2075 | 10.1504 |
Euro/Sweden | EURSEK= | 11.3305 | 11.322 | 0.08% | 1.84% | 11.3465 | 11.306 |
World FX rates https://tmsnrt.rs/2RBWI5E
Dollar steady before Fed decision https://reut.rs/4eo7fLO
Reporting by Chibuike Oguh in New York; additional reporting by Tom Westbrook and Linda Pasquini in London; Editing by Andrea Ricci, Alexandra Hudson
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.
