Dollar Rises Amid Fed Rate Cut Expectations, Better-Than-Expected Retail Sales Data
The U.S. dollar gained against major currencies on Wednesday following better-than-expected retail sales data that showed underlying economic momentum while markets braced for interest rate moves from the Federal Reserve and other central banks.
Commerce Department data on Tuesday showed U.S. retail sales surpassed expectations by jumping 0.7% in November, backed by an uptick in motor vehicle and online purchases.
Markets expect the Fed will deliver a 25-basis-point interest rate cut at the end of its two-day policy meeting on Wednesday, with futures implying a nearly 97% chance of a cut, according to the CME's FedWatch tool.
Against the Swiss franc, the dollar edged lower by 0.2% to 0.89270 in choppy trading, after hovering near its highest level since July. The euro, which is heading for a drop of nearly 5% against the dollar this year, was down 0.24% at $1.048825.
The U.S. dollar index - which tracks the currency against six others - rose 0.17% to 106.97, after trading as high as 107.08 on the session.
The pound sterling rose against the dollar after data showed British wage growth picked up more strongly than expected in the three months to October. The Bank of England will announce its rate decision on Thursday. The sterling strengthened 0.16% to $1.27040.
The yen strengthened against the dollar, as markets have scaled back the chances of a rate hike by the Bank of Japan this week in favor of a move in January. It rose 0.42% against the greenback to 153.52 per dollar.
The dollar weakened 0.06% to 7.287 versus the offshore Chinese yuan, as dour expectations for Chinese economic growth pinned 10-year bond yields near record lows.
The Australian dollar weakened 0.6% versus the greenback to $0.6332, while the Swedish crown weakened 0.76% versus the dollar to 10.964. The Norwegian Krone was also down 0.56% to 11.2052 against the greenback.
Bitcoin rose as high as $108,379.28, trading near the $110,000 mark, before paring gains and was up 0.68% to $106,798.26.
Source : Reuters
