The index dollar operated on Wednesday in his highest level in a month, after data from retail sales in the United States which indicated that the economy remains on a solid footing, dimming the market’s outlook on any possible cut in interest rates by the Federal Reserve.
The dollar index, which compares the greenback to a basket of six major currencies, rose 0.12% to 103.42 unitsafter advancing to 103.69, its highest level since December 13.
The greenback rose 0.67% in the previous session, the largest one-day percentage increase since January 3, boosted by comments from Federal Reserve Governor, Christopher Waller who stated that, although the United States is “ a stone’s throw away” of the central bank’s 2% inflation target.
Rates: a key fact modified the market perspective
According to Census Bureau of the Department of Commerce, Retail sales rose 0.6% last month, following an unrevised 0.3% rise in November. Economists polled by Reuters expected an increase of 0.4%.
Although markets see it likely that the first move to rate drop occurs in Marchexpectations of a cut of at least 25 basis points have dropped to 53.2%, according to CME’s FedWatch tool, compared to 65.1% on Tuesday.
“The report of retail sales points to growth at virtually every possible level and every aggregate within the realm of consumer spending,” said Karl Schamotta of Corpay in Toronto.
The Fed’s Beige Book of economic activity indicated that most of the 12 districts recorded little or no change from the previous day, while almost all reported a cooling of the labor market.
Markets: how other currencies operated
He dollar reached 148.52 units compared to the and in, its highest since November 30, and advanced 0.71% to 148.23. The US currency also hit its highest level in two months against the yuan, at 7.2321 units.
He euro fell 0.01%, to 1.0873 dollars, after losing 0.67% the day before, despite comments from the authorities of the European Central Bank trying to dispel expectations of rate cuts.
The pound sterling rose 0.32% to $1.268, on track for its first advance after three straight sessions of decline, as rising British inflation reinforced market expectations that the Bank of England will take longer to cut rates than other central banks.
Source: Ambito
