Dollar Gains against Major Counterparts on Strong U.S. Retail Report

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Dollar Gains against Major Counterparts on Strong U.S. Retail ReportThe dollar advanced against the yen today over favorable U.S. retail sales report, while comments by European Central Bank President Mario Draghi that indicated further monetary easing is in the offing helped the greenback advance against the euro.

The U.S. dollar index, which tracks the dollar versus a basket of six peers, was 0.32 percent higher. The dollar was up 0.43 percent against the euro at $1.3823. It was also trading 0.05 percent higher against the yen at 101.69 and also advanced 0.3 percent versus the Swiss francs at 0.8786 francs.

A report by the U.S. Commerce Department that showed that retail sales rose 1.1 percent last month, the strongest growth in 18 months, fuelled the dollar’s advance. The data showed that sales grew in almost all categories surveyed.

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Draghi was quoted over the weekend as saying that if the euro strengthens, further monetary easing policies will be rolled out. This measure was backed by the head of Bank of France Christian Noyer who said today that the “stronger the euro is, the more accommodative policy is needed,” reported Reuters.

The market has been keenly monitoring any signs that the ECB will roll out measures to combat deflation and weaken the euro. The statements issued by the two key officials are the strongest hints that measures to lower the euro’s value are in the pipeline.

However, any further gains in the dollar were held back by minutes of Fed’s meeting held last month that indicated that interest rates won’t be hiked anytime soon.

The dollar also rose 0.83 percent to 35.92 rubles as tensions in Ukraine rose following refusal by pro-Russian separatists to lay down arms and leave government property by Monday morning. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Yashu Gola at yashu@forexminute.com