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B.and Hideyuki Sano
TOKYO, September 17 (Reuters) – The dollar held near a three-week high against a basket of major currencies on Friday after a string of strong US economic data revived expectations of earlier Fed tightening.
US retail sales unexpectedly rose 0.7% month-over-month in August, although a 0.8% decline was expected, while the Philadelphia Fed business sentiment survey also showed a significant improvement.
“Yesterday’s data was pretty strong across the board,” said Yujiro Goto, chief currency strategist at Nomura Securities. “The markets feared that August consumption would be weak because of the Delta variant. But retail sales were surprisingly strong.”
The numbers helped dampen the cautious sentiment of the US economy sparked after tame consumer inflation and weak employment growth data released earlier this month, and helped revive expectations for an early tightening of the Fed.
The dollar index stood at 92.880 = USD, near 92.965 Thursday’s three-week high.
The euro hit a three-week low of $ 1.17505 overnight and was last traded at $ 1.1765 EUR =.
The common currency also hit a three-week low of 128.61 yen EURJPY = and one month low of 0.8501 pounds sterling EUR GBP = D4before you make up for some losses.
The strongest strength of the dollar was against other safe investments such as the Swiss franc and precious metals.
The Swiss franc hit a five-month low of 0.92785 against the dollar CHF =, fell 0.89% on Thursday.
Gold was trading at $ 1,754.4 an ounce XAU = after falling 2.3% in the previous session, while silver XAG = changed hands at $ 22.88 an ounce after losing 3.7% on Thursday, back near the eight-month low hit in August.
The dollar rebounded to 109.72 yen JPY =after gaining 0.34% on Thursday and up from Wednesday’s six-week low of 109.11.
The yen has so far shown limited reaction to the race to lead the ruling Liberal Democratic Party (LDP), which will officially begin on the Friday before the September 29 vote. The parliamentary dominance of the LDP means that the new party leader will become prime minister.
Many investors see Vaccine Minister Taro Kono as the front runner, followed by former Foreign Minister Fumio Kishida and former Interior Minister Sanae Takaichi.
“The world’s major macro players are not expecting major political changes. The lack of movement in the yen is evidence of that,” said Hiromichi Shirakawa, vice president and chief economist of Credit Suisse in Japan.
Still, former Interior Minister Seiko Noda’s decision to take part in the race on Thursday has increased uncertainties as it could mean no single candidate wins in the first round and the election goes to a runoff, which could work against Kono.
Elsewhere, the pound fell to $ 1.3795 GBP = D4 while the Australian dollar was trading at $ 0.7294 AUD = D4 after hitting a three-week low of $ 0.7274 in the previous session.
The Chinese yuan was licking wounds after falling 0.4% on Thursday.
In offshore trading, the yuan was last traded at 6.4530 per dollar CNH = D4, pressured by growing concerns over China’s real estate sector as investors fear real estate giant China Evergrande 3333.HK could default on coupon payment next week.
Cryptocurrencies retreated from this week’s high, with Bitcoin trading at $ 47,663 BTC = BTSP and ether at $ 3,552 ETH = BTSP.
World currency rateshttps://tmsnrt.rs/2RBWI5E
(Reporting by Hideyuki Sano; Editing by Sam Holmes)
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
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