The U.S. dollar, which gained in strength against most of its major rivals Friday morning after data showed an unexpected increase in the nation’s retail sales in September, gave up its gains and even shed some ground against some peers.

The surge in retail sales raised optimism about the economy and supported expectations that the central bank will likely hike interest rates sooner than earlier thought.

Data from the Commerce Department showed U.S. retail sales increased by 0.7% in September after rising by an upwardly revised 0.9% a month earlier. Economists had expected retail sales to edge down by 0.2% in the month compared to the 0.7% increase originally reported for the previous month.

Excluding sales by motor vehicle and parts dealers, retail sales advanced by 0.8% in September after spiking by an upwardly revised 2% in August. Economists had expected ex-auto sales to rise by 0.5% compared to the 1.8% jump originally reported for the previous month.

Data from the Labor Department showed that U.S. import prices rose by 0.4% in September after dipping by 0.3% in August. Economists had expected import prices to climb by 0.6%.

The dollar index, which rose to around 94.05, tumbled to 93.85 by late morning before recovering some lost ground. It is currently hovering around 93.95, down slightly from the previous close.

Against the Euro, the dollar is little changed at 1.1599. Eurozone visible trade surplus for August decreased from a year ago, defying expectations for an improvement, preliminary data from Eurostat showed Friday.

The goods trade surplus in August was EUR 4.8 billion versus EUR 14.0 billion in the same period last year. Economists had forecast a surplus of EUR 16.1 billion.

Exports rose 18.2% year-on-year and imports grew 26.6%.

The Pound Sterling firmed against the dollar, and is fetching $1.3741 a unit, compared with $1.3674 Thursday evening.

The Yen weakened to 114.28 a dollar, giving up more than 0.5%.

Against the Aussie, the dollar is at 0.7420, down marginally from the previous close of 0.7417.

The Swiss franc is up marginally against the dollar at 0.9230, while the Loonie is flat at C$1.2369 a dollar.


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