The U.S. dollar firmed against its major rivals on Thursday after data showing an unexpected increase in retail sales in the month of August raised hopes the Fed might consider reducing bond purchases this year.
The Commerce Department’s data showed retail sales climbed by 0.7% in August after plunging by a revised 1.8% in July. Economists had expected retail sales to decrease by another 0.8% following the 1.1% slump originally reported for the previous month.
While the rebound in retail sales partly reflected a shift back to online spending amid the spread of the delta variant of the coronavirus, the resilience shown by consumers may encourage the Federal Reserve to follow through on plans to begin tapering its asset purchases later this year.
Meanwhile, a separate report from the Labor Department showed first-time claims for U.S. unemployment benefits rebounded by slightly more than expected in the week ended September 11th.
The report said initial jobless claims climbed to 332,000, an increase of 20,000 from the previous week’s revised level of 312,000. Economists had expected initial jobless claims to rise to 328,000 from the 310,000 originally reported for the previous week.
The dollar index climbed to 92.96 Thursday afternoon, but gave up some gains subsequently and is hovering around 92.85, still up with a notable gain of about 0.33%.
Against the Euro, the dollar has strengthened to 1.1768 from 1.1816. The euro area trade surplus increased in July on higher shipments, first estimate from Eurostat revealed on Thursday.
The trade surplus increased to a seasonally adjusted EUR 13.4 billion from EUR 11.9 billion in June. Exports increased 1% month-on-month, while imports grew only 0.3%.
The dollar firmed to 1.3796 against Pound Sterling, advancing from 1.3842.
The Yen weakened to 109.74 a dollar from Wednesday’s close of 109.37 a dollar.
Against the Aussie, the dollar strengthened to 0.7294, gaining more than 0.5% from 0.7333.
The Swiss franc dropped to 0.9267 a dollar, easing from 0.9197.
The Loonie weakened to 1.2681 against the dollar from 1.2631.