By Chibuike Oguh
NEW YORK (Reuters) – The U.S. dollar rose against major currencies on Tuesday after better-than-expected retail sales data showed underlying economic momentum, as markets brace for interest rate moves from the Federal Reserve and other central banks .
U.S. Commerce Department data showed on Tuesday that U.S. retail sales beat expectations by rising 0.7% in November, supported by a rise in auto and online purchases.
Markets expect the Fed to deliver a 25 basis point rate cut at the end of its two-day policy meeting on Wednesday, with futures implying a nearly 97% chance of a rate cut, according to the CME’s FedWatch tool.
Against the Swiss franc, the dollar fell 0.2% to 0.89270 in choppy trading, after hovering near its highest level since July. The euro, which is on track for a decline of almost 5% against the dollar this year, fell 0.24% to $1.048825.
The rate, which tracks the currency against six others, rose 0.17% to 106.97 after trading as high as 107.08 during the session.
“The market is trying to debate whether it is time to let go of the dollar, which has had an incredible run this year,” said Marvin Loh, senior global market strategist at State Street (NYSE:) in Boston.
“But it seems difficult to really push back against American exceptionalism and a stronger dollar in the new administration, whether we’re talking about a Fed that is unlikely to appear as forgiving as it did in September, or the challenges that keep emerging in the new government. the emerging and developed markets that make the dollar a safe haven.”
The British pound rose against the dollar after data showed British wage growth picked up more than expected in the three months to October. The Bank of England will announce its interest rate decision on Thursday. Sterling strengthened 0.16% to $1.27040.
The yen strengthened against the dollar after markets downgraded the chances of a Bank of Japan rate hike this week in favor of a move in January. It rose 0.42% against the dollar to 153.52 per dollar.
The dollar weakened 0.06% to 7.287 against offshore as gloomy expectations for Chinese economic growth pushed yields near record lows.
The Australian dollar weakened 0.6% against the dollar to $0.6332, while the Swedish krona weakened 0.76% against the dollar to 10.964. The Norwegian krone also fell 0.56% to 11.2052 against the dollar.
Sweden’s Riksbank is expected to cut rates by as much as half a point this week, while Norges Bank is likely to leave rates unchanged.
rose to $108,379.28, trading around $110,000, before paring gains and rising 0.68% to $106,798.26.
“I think the market is concerned that there will only be two cuts in the (closely watched Fed dot plot) next year; so it’s a bit positive for the dollar,” said Steve Englander, global head of G10 FX Research and Macro Strategy for North America at Standard Chartered (OTC:) Bank in New York.
Currency bid prices on December 17 8:55 PM
GMT
Description RIC Last US Close Previous session Pct Change YTD Pct High bid Low bid
Dollar index 106.97 106.79 0.19% 5.52% 107.08 106.69
Euro/dollar 1.0487 1.0514 -0.25% -4.99% $1.0536 $1.0479
Dollar/yen 153.53 154.125 -0.56% 8.66% 154.245 153.185
Euro/yen 161.01 162.03 -0.63% 3.46% 162.47 160.78
Dollar/Swiss 0.8928 0.8947 -0.21% 6.08% 0.8975 0.8916
Sterling/Dollar 1.2706 1.2684 0.16% -0.17% $1.2728 $1.2669
Dollar/Canadian 1.4312 1.4243 0.5% 7.98% 1.4324 1.4233
Aussie/Dollar 0.6332 0.6371 -0.61% -7.13% $0.6378 $0.6332
Euro/Swiss 0.9361 0.94 -0.41% 0.81% 0.9417 0.9356
Euro/British Pound 0.8252 0.8286 -0.41% -4.8% 0.8295 0.825
New Zealand dollar/dollar 0.575 0.5783 -0.55% -9% $0.5793 0.5751
Dollar/Norway 11.2061 11.1429 0.56% 10.56% 11.2146 11.1343
Euro/Norway 11.7517 11.7229 0.25% 4.7% 11.774 11.7184
Dollar/Sweden 10.9697 10.8745 0.88% 8.97% 10.9713 10.8712
Euro/Sweden 11.5048 11.4389 0.58% 3.41% 11.5085 11.4402
