By Caroline Valetkevitch
NEW YORK, Sept 16 (Reuters) – The dollar rose and hit its highest level in nearly three weeks against a basket of currencies on Thursday after data showed U.S. retail sales unexpectedly increased in August, easing some concerns about a sharp slowdown in economic growth.
The dollar index =USD, which measures the U.S. currency against six others, added to gains following the report and was last up 0.5% at 92.866. It hit its highest level since Aug. 27.
Retail sales rose 0.7% last month, boosted in part by back-to-school shopping and child tax credit payments, while data for July was revised down.
A separate report showed U.S. initial claims for state unemployment benefits increased 20,000 to a seasonally adjusted 332,000 for the week ended Sept. 11. Economists had forecast 330,000 applications for the latest week.
“If you look at the retail sales number, it’s quite constructive even with the revisions, so we are seeing the dollar benefit from that, particularly against the funding currencies like the euro, Swiss and the yen,” said Bipan Rai, North American head of FX strategy for CIBC Capital Markets in Toronto.
The news could bolster investor expectations for next week’s Federal Reserve policy meeting and how soon the U.S central bank will start to taper stimulus.
“It feels like whatever lingering concerns there were with the underlying economy … that was kind of washed away a little bit. So as we move towards the Fed next week, the evidence backs up the idea that we’re going to get a taper signal from the Fed at the meeting,” he said.
On Tuesday, the dollar index fell to a one-week low of 92.321 after a softer-than-expected inflation report. Its low for the month was 91.941, on Sept. 3, when payrolls data disappointed.
Investors are looking for clarity on the outlook for both tapering and interest rates at the Fed’s two-day policy meeting that ends next Wednesday.
Tapering typically lifts the dollar as it suggests the Fed is one step closer to tighter monetary policy.
It also means the central bank will be buying fewer debt assets, in effect reducing the amount of dollars in circulation, which in turn lifts the currency’s value.
The dollar also gained 0.3% to 109.70 yen JPY=EBS, after sliding to a six-week low of 109.110 in the previous session.
The euro EUR=EBSwas 0.4% lower at $1.1766.
The Swiss franc also fell against the dollar and was last at 0.9263 franc per dollar. CHF=EBS
Elsewhere, the Australian dollar AUD=D3 was down 0.5% at $0.7296.
Earlier, data showed the country’s jobless rate unexpectedly fell to 4.5%, but the statistics bureau said the change reflected a drop in the participation rate rather than a strengthening of the labor market.
In cryptocurrencies, moves in bitcoin were relatively subdued. It was last down 0.9% at $47,711 BTC=BTSP. Ether changed hands at $3,589 ETH=BTSP, down 0.7%.
AMC Entertainment Holdings Inc AMC.N boss Adam Aron said in a tweet this week that the theater chain would accept ether, bitcoin cash and litecoin alongside bitcoin for ticket purchases.
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Currency bid prices at 3:21PM (1921 GMT)
Description
RIC
Last
U.S. Close Previous Session
Pct Change
YTD Pct Change
High Bid
Low Bid
Dollar index
=USD
92.8660
92.4620
+0.45%
3.206%
+92.9650
+92.4570
Euro/Dollar
EUR=EBS
$1.1766
$1.1816
-0.42%
-3.70%
+$1.1820
+$1.1751
Dollar/Yen
JPY=EBS
109.7000
109.3800
+0.31%
+6.19%
+109.8250
+109.2100
Euro/Yen
EURJPY=
129.06
129.20
-0.11%
+1.69%
+129.3400
+128.6100
Dollar/Swiss
CHF=EBS
0.9263
0.9197
+0.73%
+4.72%
+0.9271
+0.9195
Sterling/Dollar
GBP=D3
$1.3793
$1.3843
-0.33%
+1.00%
+$1.3852
+$1.3765
Dollar/Canadian
CAD=D3
1.2675
1.2624
+0.41%
-0.46%
+1.2699
+1.2618
Aussie/Dollar
AUD=D3
$0.7296
$0.7334
-0.50%
-5.14%
+$0.7345
+$0.7274
Euro/Swiss
EURCHF=
1.0898
1.0865
+0.30%
+0.84%
+1.0901
+1.0858
Euro/Sterling
EURGBP=
0.8528
0.8537
-0.11%
-4.58%
+0.8547
+0.8501
NZ Dollar/Dollar
NZD=D3
$0.7077
$0.7110
-0.45%
-1.44%
+$0.7140
+$0.7060
Dollar/Norway
NOK=D3
8.6195
8.5755
+0.66%
+0.52%
+8.6470
+8.5725
Euro/Norway
EURNOK=
10.1436
10.1265
+0.17%
-3.09%
+10.1720
+10.1130
Dollar/Sweden
SEK=
8.6237
8.5694
+0.10%
+5.21%
+8.6512
+8.5700
Euro/Sweden
EURSEK=
10.1482
10.1380
+0.10%
+0.71%
+10.1710
+10.1360
World FX rateshttps://tmsnrt.rs/2RBWI5E
(Reporting by Caroline Valetkevitch Additional reporting by Ritvik Carvalho in London and Kevin Buckland in Tokyo Editing by Alexander Smith, Mark Potter and Jonathan Oatis)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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