Dollar bulls emerge after upbeat US retail sales, oil currencies soft
Credit: Reuters/Gary Cameron
1 of 3. A sheet of the front side of United States one dollar bills is seen during production at the Bureau of Engraving and Printing in Washington November 14, 2014.
Crude oil slid below $59 a barrel for the first time in over five years, extending a sharp decline that prompted a surprise interest rate cut from the Norwegian central bank on Thursday.
The greenback climbed as high as 119.55 yen JPY=, bouncing off a two-week low of 117.44, after a closely watched report showed U.S. retail sales rose a forecast-beating 0.7 percent in November. It has since drifted back to 118.92.
The figures provided fresh evidence of underlying momentum in the economy and highlighted the diverging outlooks between the United States and most of the developed world.
'Firm November data continues to point to a hawkish adjustment in forward guidance at next week's FOMC meeting and we expect this to keep the USD well supported into year-end,' analysts at BNP Paribas wrote in a note to clients.
In contrast, the European Central Bank's second offering of almost zero-cost loans to banks drew only tepid interest, underlining fragile confidence in the euro zone and making ECB money-printing appear all but inevitable.
Unsurprisingly, the euro dipped back to $1.2370 EUR= from a near two-week high of $1.2496. It last traded at $1.2410, hovering near the 38.2 percent retracement level of its rise from $1.2247 to $1.2496 in the past few sessions.
Sellers hit commodity currencies hard, driving both the Canadian and Australian dollars to fresh multi-year lows overnight. The loonie slumped to a five-year low of C$1.1551 per USD CAD=D4 and was last at C$1.1523.
Its Australian counterpart touched a 4-1/2-year trough of $0.8214 AUD=D4. The Aussie's decline was egged on by the head of the Reserve Bank of Australia, who said in an interview with a local paper that he would like to see the currency fall back to 75 U.S. cents.
Still, the fact that RBA Governor Glenn Stevens did not signal any urgency to cut interest rates imminently saw the Aussie edge back to $0.8266.
That was not the case for the Norwegian crown, which skidded to its lowest in over 10 years after the central bank unexpectedly cut interest rates.
The bank said it could ease policy further still because lower oil prices were hurting the economy's growth prospects.
The dollar rallied to 7.3161 crowns NOK=, reaching a high not see since 2003. The euro jumped to a 5-1/2 year high of 9.0708 crowns EURNOK=R
Other currencies feeling the heat of weaker oil prices included the Mexican peso MXN=, which dropped to its lowest in nearly six years at 14.7155 per USD.
The focus in Asia will be on retail sales data out of China, where any downside surprise will only add to calls for further easing there. ECONASIA
(Editing by Jonathan Oatis)
Post a Comment for "Dollar bulls emerge after upbeat US retail sales, oil currencies soft"