The US dollar rose on Tuesday after data on retail sales in April was lower than expected but suggested a stronger underlying trend, as investors remained concerned about the debt ceiling issue.
US President Joe Biden and Republican House of Representatives Speaker Kevin McCarthy will meet later on Tuesday to try to hammer out a deal to raise the debt ceiling before the money to pay the US government goes into overdrive. It will take a little more than two weeks before there can be a shortage. its bills.
McCarthy told reporters Tuesday that his party, which controls the chamber by a 222-213 margin, would only agree to a spending-cutting deal.
“There may be some potential news on the debt limit today. It is likely that it is being pushed closer to the deadline, which is early next month,” said Vasily Serebryakov, FX strategist at UBS.
Hence, the market should stay in a range, he added. I don’t really see any directional impulse here.
The dollar index was up 0.2% at 102.59. Against the yen, the greenback rose 0.4% to 136.62 yen.
The euro fell 0.1% to $1.0865 against the dollar, while sterling fell 0.3% to $1.2490.
The greenback rose earlier after US retail sales rose less than expected in April, but details showed the underlying trend remained solid. This suggested that the outlook for consumer spending remained strong at the start of the second quarter.
Retail sales rose 0.4% last month. The data for March was revised slightly lower to show sales up 0.7% instead of 0.6% as previously reported. Economists polled by Reuters had forecast a 0.8% rise in sales.
“It was a rebound after two soft months, which suggests that consumer spending is still on hold,” Serebryakov said.
In line with a generally upbeat economic picture, industrial production rose 1% in April, easily topping expectations for a flat reading and slightly above a revised 0.8% increase in March.
Reports suggested that while the market widely expected the Federal Reserve to hold off on raising rates at the next meeting, a hike in borrowing costs was not off the table.
The rate futures market raised the odds of a 25 basis-point rate hike next month to nearly 22% on Tuesday. On Monday it was about 16 per cent late.
Richmond Federal Reserve President Thomas Barkin reiterated the higher-long mantra on Tuesday. He said he likes the “optionality” contained in the central bank’s latest policy statement, but he is “comfortable” with raising interest rates further if that is necessary to reduce inflation.
That has been the message from several Fed officials over the past week.
“While there were some mixed signals in today’s various data reports, the net majority were favorable and we continue to track some upside risks to our 1.0% 1Q GDP growth projection at the start of the quarter,” chief US economist Michael Ferroli wrote JP Morgan.
“Nevertheless, given all the dark clouds on the horizon, we continue to hold the Fed to its next meeting in mid-June.”
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Currency Quote Price at 12:13 PM (1613 GMT)
Details RIC Last US Close PCT Change YTD PCT High Bid Low Bid
last change
Session
Dollar Index 102.5900 102.4300 +0.17% -0.870% +102.6900 +102.1900
EUR/USD $1.0865 $1.0874 -0.07% +1.41% +$1.0905 +$1.0855
USD/JPY 136.6150 136.0950 +0.41% +4.23% +136.6750 +135.6800
EUR/JPY 148.45 148.01 +0.30% +5.81% +148.4800 +147.6200
Dollar/Swiss 0.8956 0.8956 +0.02% -3.13% +0.8970 +0.8920
Sterling/Dollar $1.2490 $1.2531 -0.33% +3.28% +$1.2546 +$1.2466
Dollar/Canadian 1.3461 1.3466 -0.04% -0.66% +1.3493 +1.3405
AUD/USD $0.6658 $0.6700 -0.61% -2.31% +$0.6710 +$0.6651
Euro/Swiss 0.9730 0.9739 -0.09% -1.67% +0.9742 +0.9720
Euro/Sterling 0.8697 0.8678 +0.22% -1.66% +0.8718 +0.8680
NZ $0.6235 $0.6243 -0.11% -1.80% +$0.6260 +$0.6224
dollar/dollar
Dollar/Norway 10.7180 10.6000 +1.18% +9.28% +10.7290 +10.5930
Euro/Norway 11.6465 11.5214 +1.09% +10.99% +11.6542 +11.5195
Dollar/Sweden 10.4104 10.3480 +0.55% +0.03% +10.4251 +10.3188
Euro/Sweden 11.3073 11.2454 +0.55% +1.41% +11.3197 +11.2411
(This story has not been edited by News18 staff and is published from a syndicated news agency feed)