US Dollar (USD) Exchange Rate Higher as US Data Tops Forecasts This Week
The US Dollar exchange rate was riding high yesterday as the surprising news that US retail sales surged by 1.1 per cent in March (instead of increasing the 0.9 per cent expected) pushed investors towards the safe-haven asset.
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Overnight the ‘Greenback’ consolidated gains as Ukraine tensions persisted and investors speculated on two upcoming speeches to be given by Federal Reserve Chairman Janet Yellen.
Today further US Dollar gains were enabled as the US consumer price index climbed by 0.2 per cent in March month-on-month, twice the 0.1 per cent gain expected.
On the year consumer prices were up 1.5 per cent.
Bloomberg News quoted foreign exchange strategist Vassili Serebriakov as stating; ‘The Dollar should start recovering from the low levels. Data is showing a spring bounce for the economy. The CPI should help some of the disinflationary concern, it’s kind of a step in the right direction.’
In the UK, meanwhile, data showed that inflation remained below the Bank of England’s 2 per cent target, with prices having advanced by just 1.6 per cent on an annual basis in March – upping the odds of the Bank of England leaving fiscal policy unaltered for the foreseeable future.
The safe-haven asset was also stronger against the Australian Dollar having advanced on its South Pacific peer overnight after the Reserve Bank of Australia published minutes from its most recent policy meeting.
The minutes highlighted the central bank’s ongoing concerns regarding the strength of the domestic currency and intimated that interest rates would be held at record lows in the near term.
Tomorrow US manufacturing production data could impact the US Dollar.
A 0.6 per cent increase in output is expected.
As it stands the US Dollar is trading against the British Pound in the region of 0.5980 and against the Euro in the region of 0.7243