Dollar up ahead of U.S. retail report, euro steady

by Jonathan Adams
euro extends gains

The euro has steadied this week and was last down 0.1% to $1.0724, up from a six-week low of $1.0668 on Friday after jumping 0.26% on Monday

The dollar inched up on Tuesday as traders awaited a U.S. retail sales report and comments from Fed officials to help gauge the timing of interest rate cuts, while the euro steadied after last week’s politics-driven tumble.

The U.S. dollar index, which measures the currency against six major rivals, was 0.18% higher at 105.46. It shed 0.2% on Monday as it pulled back from Friday’s six-week high of 105.80.

The greenback has been pulled in different directions as mild U.S. inflation numbers contrasted with an overall hawkish stance by Fed officials at last week’s policy meeting, when they cut their previous median projection for three quarter-point rate cuts this year to one.

Last week’s 0.6% rally in the dollar was mostly driven by a sharp euro selloff after French President Emmanuel Macron called a shock snap election in response to his ruling centrist party’s trouncing by Marine Le Pen’s eurosceptic National Rally in the European Parliament elections.

The euro has steadied this week and was last down 0.1% to $1.0724, up from a six-week low of $1.0668 on Friday after jumping 0.26% on Monday.

Over the weekend, France’s Le Pen said that she would be ready to work with President Macron and would not seek him out, according to Mohit Kumar, chief economist for Europe at Jefferies.

A portion of the recent risk off moves has been driven by fears of ‘Frexit’ and euro area breakup, he added. Those fears are overblown.

U.S. retail sales data is due at 1230 GMT and is expected to show a 0.3% month-on-month rise in May after zero growth in April.

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of Trading and Investment News. The information provided on Trading and Investment News is intended for informational purposes only. Trading and Investment News is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

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