The U.S. dollar gained significant ground against other major currencies on Wednesday, riding on upbeat economic data and optimism about economic recovery.
Data from the Commerce Department showed U.S. retail sales rose 5.3% in January, as against expectations for a 1.1% jump. In December, retail sales had slid by a revised 1%, after falling by 0.7% a month earlier.
Excluding sales by motor vehicle and parts retailers, retail sales soared by 5.9% in January after tumbling by a revised 1.8% in December. Economists had expected ex-auto sales to increase by 1% compared to the 1.4% slump originally reported for the previous month.
Data from the Labor Department showed that U.S. producer prices jumped much more than expected in the month of January. The data said the producer price index for final demand climbed 1.3% in January after rising by 0.3% in December. Producer prices were expected to rise by 0.4%.
Minutes from the Federal Reserve’s latest monetary policy showed participants described the economy as “far from” achieving the Fed’s goal of maximum employment. Participants observed that “even with a brisk pace of improvement in the labor market, achieving this goal would take some time.”
“Participants noted that economic conditions were currently far from the Committee’s longer-run goals and that the stance for policy would need to remain accommodative until those goals were achieved,” the minutes said.
The dollar index, which rose to 91.06, was last seen at 90.92, up 0.45% from previous close.
Against the Euro, the dollar firmed up to $1.2043, gaining more than 0.5%.
The Pound Sterling was weaker against the dollar, fetching $1.3865 a unit, compared with $1.3903 Tuesday evening.
The Yen firmed up to 105.78 before easing to 105.89, but was still fairly up from Tuesday’s 106.05 a dollar. A report from the Ministry of Finance showed Japan’s merchandise trade deficit stood at 323.9 million yen in January, beating forecasts for a shortfall of 600 billion yen following the 751 billion yen surplus in December.
The dollar was slightly up against the Aussie with the AUD-USD pair at 0.7751.
The Swiss franc was trading at 0.8989 a dollar, losing more than 0.7%, while the Loonie was at C$1.2701 after closing at C$1.2690 Tuesday evening.
Data from Statistics Canada showed Canada’s annual inflation rate rose to 1% in January 2021, after coming in at 0.7% in December 2020. Economists had forecast inflation rate to come in at 0.9%.
Core consumer prices in Canada increased 1.6% in January over the same month in the previous year.
The material has been provided by InstaForex Company – www.instaforex.com