Forex – U.S. Dollar Surges After Solid Retail Sales Data
Investing.com – The U.S. dollar surged Friday as retail sales picked up in May, indicating a rebound in the American economy.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was up 0.4% to an almost three-week high of 97.398 by 11:03 AM ET (15:03 GMT).
The report followed weak inflation reports and rising jobless claims this week, which, coupled with trade tensions, have led traders to think the Federal Reserve could cut interest rates later this year.
Details of the central bank’s thinking could come as soon as next week, when the FOMC meets. The Fed is expected to lower rates in July, with an 89.9% chance priced in, according to Investing.com’s Fed Rate Monitor Tool.
The dollar was flat against the safe-haven Japanese yen, with USD/JPY at 108.40, amid fears that China’s economy is under pressure from trade disputes with the U.S.
Data overnight showed that China’s industrial output growth slowed to its slowest rate in more than 17 years in May.
Elsewhere, the euro slumped on the stronger dollar, with EUR/USD falling 0.4% to 1.1223. Sterling was also lower, with GBP/USD slipping 0.5% to 1.2607, while USD/CAD rose 0.3% to 1.3365.