Dollar on track for weekly gain

Dhaka,  Sun,  23 October 2016
Published : 14 Oct 2016, 12:41:55

Dollar on track for weekly gain as investors await Yellen

The dollar rose on Friday, on track for a weekly gain though shy of this week's highs, as investors awaited US retail sales data and remarks from Federal Reserve officials that could cement expectations of a US interest rate hike this year, reports Reuters.

The dollar index, which tracks the greenback against a basket of six major rival currencies, added 0.3 per cent to 97.812 .DXY.

That was below a seven-month high of 98.129 touched on Thursday, but still up 1 per cent for the week, and more than 2 per cent for the month so far.

Retail sales data could offer some insight on the strength of consumption. Following the data, Fed Chair Janet Yellen will address a Boston Fed economics conference, at which Boston Fed governor Eric Rosengren will also speak.

The minutes of the latest Fed meeting in September, released on Wednesday, prompted investors to raise their bets of a Fed rate increase at its December policy meeting. Markets are now pricing in around a 70 per cent chance that the Fed will move.

"There were three dissents, but the market has been jawboned into believing the Fed will raise rates in December," said Bill Northey, chief investment officer of the private client group at US Bank in Helena, Montana.

Friday's Fed comments will likely offer "no material departures from that script," he said.

The dollar has also benefited as Democratic presidential nominee Hillary Clinton widened her lead in opinion polls over Republican rival Donald Trump, as Clinton is viewed as the candidate more likely preserve the status quo if elected.

But on Thursday, downbeat trade data from China took some wind out of the dollar's sails. Chinese exports fell 10 per cent year-on-year last month, far more than expected.

Friday's Chinese data was more comforting for investors: September producer prices unexpectedly rose for the first time in nearly five years, while consumer inflation also beat expectations.

- TM
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