For the second straight day on Tuesday the dollar climbed against a basket of major currencies as the investors were prompted by positive U.S. economic data to return to the theme that the U.S. will be at the forefront of a global economic recovery.
With it U.S. interest rates will be pushed and U.S. assets would become more attractive, that will boost the demand for the dollars to buy them.
Sales at U.S. retailers rose
According to data on Tuesday as government-sponsored auto incentives buoyed demand for motor vehicles, sales at U.S. retailers rose at their fastest pace in three-and-half years in August , it has also showed that sales outside the auto sector also were strong.
A government report showed on Tuesday that U.S. producer prices rose more than twice as much as what was expected in August on the biggest surge in gasoline prices that was ever recorded in more than 10 years and compared with a year ago, prices declined less than expected.
Rise in the dollar index
The dollar index, by which the dollar’s value against a basket of currencies is measured, rose 0.2 percent to 76.867 .DXY, it stayed above a one-year low of 76.457 hit last week.
The euro was last at $1.4589, which has dropped down to 0.2 percent on the day.
The dollar rose 0.5 percent to 91.37 yen JPY=, against the yen, pulling away from a seven-month low hit on Monday.
Pound Underperforms
Sterling underperformed after the statement of Bank of England Governor Mervyn King who stated that on commercial banks’ reserves, central bank was looking at reducing the rate, fueling speculation of further quantitative easing.
On the day Sterling was down 0.7 percent to $1.6454 GBP= after King’s statement that has fueled speculation that yet another device may be used by the BoE in its quantitative easing toolkit.
On King’s comments, Sterling also hit a four-month low against the euro.
Germany’s ZEW survey
The euro also was hurt by Germany’s ZEW survey that has indicated that investor sentiment had risen less than what was expected in September.
The think tank’s economic sentiment index has raised from 56.1 to 57.7 in August, but below forecasts of 60.0. An index on current conditions has improved from -77.2 to -74.0. A reading of -68.0 has been forecasted by economists.
The Australian dollar stood at $0.8580 AUD=, which has dropped down 0.4 percent on the day.
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Posted by R. MAK. in Currency Rates, Currency Trade, Economic Outlook, Forex Basics, Forex News, Forex trading, News, World Economy · 0 Comment
