Yahoo Finance Strong U.S. Retail Sales, Weaker Euro Help Dollar Rebound
The U.S. Dollar posted a two-sided trade on Thursday against a basket of major currencies. The Greenback was under pressure early in the session as investors continued to react to the “dovish” Fed monetary policy statement released on Wednesday. Although the Fed raised its benchmark interest rate 25 basis points, this was widely expected. The fact that the central bank did not increase the number of rate hikes in 2018 and 2019 disappointed investors.
March U.S. Dollar Index futures settled at 93.051, up 0.027 or +0.03%.
The dollar made a comeback after the Euro weakened. The U.S. Dollar rebounded against the Euro after the European Central bank raised growth and inflation forecasts for the Euro area, but stuck with its pledge to provide stimulus for as long as needed.
U.S. Economic Data
U.S. retail sales increased more than expected in November, helped by a brisk start to the holiday shopping season. Investors read this as a sign of sustained strength in the economy.
The Commerce Department said on Thursday that retail sales rose 0.8 percent last month. Data for October was revised to show sales gaining 0.5 percent instead of the previously reported 0.2 percent rise. Economists were looking for an increase of 0.3 percent in November.
The Labor Department said initial claims for state unemployment benefits dropped 11,000 to a seasonally adjusted 225,000 for the week-ended December 9. That was the lowest reading since mid-October when claims dropped to 223,000, a level not seen since March 1973.
In other news, Import Prices came in at 0.7%, matching estimates. Flash Manufacturing PMI came in at 55.0, up from 53.9 and better-than-the 54.0 estimate. Flash Services PMI came in below expectations at 52.4. Business Inventories fell 0.1% as expected.
Gold
Gold hit a one-week high early Thursday in reaction to the Fed’s “dovish” outlook for interest rates, but pulled back later in the session when the dollar recovered after the Euro weakened. Gold was also underpinned by a drop in demand for higher yielding assets.
Crude Oil
U.S. West Texas Intermediate and international-benchmark Brent crude oil rebounded after an early sell-off. Traders said that oversold technical conditions and profit-taking probably contributed to the late session recovery.
Prices eased early Thursday after the International Energy Agency increased its forecast for U.S. oil output growth in 2018, raising the prospect of excess supply.
U.S. Stock Market
The major U.S. stock indexes closed lower on Thursday after two Republican Senators raised some concerns about the tax bill.
The Dow reached an all-time high earlier in the session, but the lower close ended a five-day winning streak. The S&P 500 Index closed lower, pressured by weakness in health care and materials stocks.
This article was originally posted on FX Empire
