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US dollar shrugs off weak economic data

Friday, September 16, 2016 - 06:40

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The dollar avoided major swings on Thursday after a trove of mediocre US economic data lessened the odds the Federal Reserve will hike interest rates next week.

[NEW YORK] The dollar avoided major swings on Thursday after a trove of mediocre US economic data lessened the odds the Federal Reserve will hike interest rates next week.

Although most Fed watchers did not previously view a September interest rate hike as likely, those chances diminished further after the Commerce Department reported that US retail sales fell 0.3 per cent in August from the prior month.

Near 2100 GMT, the dollar had risen a hair compared with the euro but dipped against the yen. Analysts viewed the ho-hum reaction as reflecting the Fed's unique status compared with other central banks.

"A door seen as all but shut to a rate rise on September 21 has made sustaining strength tough on the greenback," said Joe Manimbo, analyst at Western Union Business Solution.

"But bouts of dollar weakness have been undercut by the view that the Fed would be the leader of the global pack in boosting borrowing rates." The British pound also remained within a tight range after the Bank of England kept its key interest rate at a record low 0.25 per cent, but hinted that it could cut rates again later this year.

AFP

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