The USD seems to have one of the best times recently as it held gains when most commodities declined this week. Even Asian stocks’ fluctuation did not seem to have any impact on the USD’s value. Whereas bonds fell in Asia after the 30-year Treasury yield approached a two-year high on signs of faster U.S. growth, the USD was firmer in Asia on Wednesday and racked up a third session of gains.
Although Euro too got a boost against Japanese currency, reaching 130.30 from the week’s low at 127.95, it was the USD that gained the most. Out of the various currencies on the move on Wednesday, the New Zealand dollar did well when the news for better domestic retail sales came in. The New Zealand currency stood at $0.7981, up from Tuesday’s low at $0.7933.
Robust U.S. Core Retail Sales
According to the leading Forex experts driving force behind the upward movement in the USD is a robust 0.5 percent increase in U.S. core retail sales which is the highest since December, 2012. They say the biggest sales in the last eight month in the U.S. core retail sales has led to a 9 basis-point jump in 10-year Treasury yields to 2.72 percent.
The experts further say that the growth is testing a huge chart level around 2.75%; they also expect that it may even go up to 3%.They admit that Fed tapering is back on the menu which is influencing the value of USD. The USD’s advantage against Yen has been attributed to the fact that Japanese bond yields are being held down by aggressive buying from the Bank of Japan.
When the U.S. economic recovery is on track and the USD is doing well, the Forex market saw significant changes as the euro slipped back to $1.3261 which was at $1.3316 on Tuesday. Forex experts even admit that the USD may emerge out of its multi-year weakening when the Fed is all set to normalize monetary policy.
According to the Bloomberg Dollar Index, the USD was headed for its highest close in a week. It reported that whereas South Korea’s currency fell to 1,119.38/USD, the Australian dollar further weakened 0.1% to 91.05 U.S. cents. However, the New Zealand dollar was 0.2% stronger at 79.83 U.S. cents as the national economy of the country received better performance in core retail sales.
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