The U.S. dollar drifted higher against its most major peers in the European session on Friday, as an unexpected increase in the nation’s retail sales for September bolstered optimism about the economic growth and supported expectations that the Federal Reserve could hike interest rate sooner than projected.

Data from the Commerce Department showed that retail sales climbed 0.7 percent in September after jumping by an upwardly revised 0.9 percent in August.

The continued sales growth came as a surprise to economists, who had expected retail sales to edge down by 0.2 percent compared to the 0.7 percent increase originally reported for the previous month.

Excluding sales by motor vehicle and parts dealers, retail sales advanced by 0.8 percent in September after spiking by an upwardly revised 2.0 percent in August.

Economists had expected ex-auto sales to rise by 0.5 percent compared to the 1.8 percent jump originally reported for the previous month.

Data from the Labor Department showed that U.S. import prices increased less than expected in the month of September.

The Labor Department said import prices rose by 0.4 percent in September after dipping by 0.3 percent in August. Economists had expected import prices to climb by 0.6 percent.

Philadelphia Federal Reserve Bank President Patrick Harker said on Thursday that the central bank could start reducing the asset purchases soon, but it is unlikely to hike interest rates until late next year or early 2023.

Harker added that inflation is seen around 4 percent for 2021, which is likely to fall to “a bit over” 2 percent next year and “right at” 2 percent in 2023.

The greenback showed mixed trading against its major counterparts in the Asian session. While it rose against the franc and the yen, it declined against the euro and the pound.

The greenback advanced 0.7 percent against the yen, approaching more than a 3-year high of 114.46. The pair had closed Thursday’s deals at 113.68. Further rally may take the greenback to a resistance around the 116.00 area.

Data from the Ministry of Economy, Trade and Industry showed that Japan’s tertiary activity declined for the second straight month in August.

The tertiary activity index fell 1.7 percent month-on-month in August, following a 0.6 percent decrease in July.

The greenback added 0.4 percent to hit a 2-day high of 0.9264 against the franc. At yesterday’s trading close, the pair was quoted at 0.9229. Immediate resistance for the U.S. currency is seen around the 0.94 level.

The greenback rebounded to 1.1589 against the euro, after a fall to 1.1619 at 4 am ET. The pair was worth 1.1597 when it closed deals on Thursday. The greenback is likely to find resistance around the 1.13 level, if it rises again.

The greenback rose to 0.7403 against the aussie, after touching 0.7440 at 3:15 am ET, which was its lowest level since September 7. The greenback was worth 0.7416 per aussie at Thursday’s New York session close. Next near term resistance for the greenback is likely seen around the 0.72 level.

The greenback bounced off from a 3-week low of 0.7067 against the kiwi, with the pair trading at 0.7045. At Thursday’s close, the pair was valued at 0.7034. Should the greenback continues its uptrend, 0.68 is possibly seen as its next resistance level.

The greenback edged higher to 1.2386 against the loonie, from more than a 3-month low of 1.2337 seen at 3:15 am ET. The greenback was trading at 1.2370 against the loonie at yesterday’s close. Further rise in the currency may challenge resistance around the 1.25 region.

The greenback, however, fell to its weakest level since September 17 against the pound, at 1.3758. The pound-greenback pair had ended yesterday’s trading session at 1.3671. The greenback may face support near the 1.41 level.


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