The dollar strengthened against its peers on Friday and dollar demand continued to be boosted as talk of a rate increase by the Federal Reserve slated for December intensified. The dollar overlooked data which revealed that US retail sales increased less than forecast for October while producer prices were on the decline. US retail sales ticked up 0.1% in October following data for the 2 months prior which showed no change. The producer price index dropped 0.4% in October following a 0.5% decrease the previous month. The US consumer sentiment index posted a reading of 93.1 in November up from 90.0 in October. The data opened the door for a December rate hike by the Fed. The US Dollar Index added 0.33% trading at 98.90 towards Friday’s close.
The euro weakened against the dollar with the pair losing 0.39% trading at 1.0773 towards Friday’s close. The euro was weighed down by data which revealed that euro zone GDP grew by 0.3% in the 3rd quarter matching forecasts following a rate of growth of 0.4%. German GDP increased by 0.3% for the 3rd quarter matching forecasts after being up 0.4% in the 2nd quarter. French GDP also grew at a rate of 0.3% matching forecasts.
The pound weakened against the dollar with the pair down 0.17% trading at 1.5201 after the release of US data. Leading up to the data releases the pound held its ground against the greenback with the pair trading at 1.5199 early during the European session with no clear sign from Federal Reserve Chair Janet Yellen on when a possible rate hike would take place.
The yen held its ground against the dollar with the pair trading at 122.60 towards Friday’s close coming off its 2.5 month high at 123.59 reached at the beginning of the week. Higher US stock prices and lower bond yields helped push the pair lower. Initial GDP data for Japan’s 3rd quarter and statements on fiscal policy from the Bank of Japan are scheduled to be released this week which the market eagerly awaits.
The Australian, New Zealand and Canadian dollars weakened against the greenback. The Aussie declined 0.24% against the dollar with the pair trading at 0.7109 towards Friday’s close. The pair had previously moved higher on the back of solid Australian employment data. Policy stance between the Reserve Bank of Australia and the Fed continue to differ. The kiwi dollar dropped 0.37% against the greenback with the pair trading at 0.6523 towards Friday’s close. The loonie declined 0.41% against the greenback with the pair reaching a new 1 month high of 1.3342 as oil prices tanked to a 3 month low trading at $40 on the back of more signs of a global supply glut.
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