Retail sales data came in better than expected and appeared to support a less aggressive stance by the Federal Reserve on rates.
He global dollar The US dollar strengthened against most major currencies on Tuesday following better-than-expected retail sales data. USA, which seemed to support a less aggressive stance of the Federal Reserve (Fed), which is expected to implement its first cut in the interest rates in more than four years.
The data of the Department of Commerce U.S. sales unexpectedly rose 0.1 percent in August, suggesting the economy remained on solid footing for much of the third quarter, data showed Tuesday.
He Federal Open Market Committee The Federal Reserve will announce its interest rate decision at the end of its meeting on Wednesday, after which the president Jerome Powell will hold a press conference. The Federal Reserve last cut rates in March 2020 during the COVID-19 pandemic.
“I think right now all markets are hostage to tomorrow’s FOMC meeting,” he said. Marvin Loh, Senior Global Markets Strategist State Street in Boston. “Retail sales were decent. This certainly does not indicate that there should be an imminent rush to implement massive cuts, and it would be unusual for the Fed to panic by cutting rates given the current market conditions,” he said.
How did the dollar fare against other currencies?
He dollar index, which measures the greenback’s value against a basket of currencies, gained 0.199% to 100.90. In addition, against the yen, The currency rose 0.87% to 141.830 after initially weakening following the retail sales data.
Meanwhile, the euro fell 0.10% to $1.112125, close to the year’s high of $1.1201. Against the Swiss franc, The greenback rose 0.15% to 0.8460.
Fed funds futures show the probability of a 50 basis point rate cut stood at 63%, up from 30% a week ago, while the chances of a 25 basis point cut were at 37%. The odds have been sharply reduced after media reports revived the prospect of more aggressive easing.
Source: Ambito
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