Greenback rallies on US retail, producer price data

The greenback rallied on Thursday (Mar 14) after both US retail sales for February and producer price data were released.

It was the producer price release which had the last say in where the US dollar would go.

The US dollar index gained 0.39 per cent at 103.15.

With a firm beat in both the headline and the core measures, traders are starting to get nervous that June might become an uncertainty for that initial rate cut from the US Federal Reserve.

The Canadian dollar, meanwhile, weakened against the greenback, and the yield on benchmark government debt climbed.

The loonie was trading 0.1 per cent lower at C$1.3477 to the greenback, or 74.2 US cents, after trading in a range of 1.346 to 1.3481.

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The euro was slightly lower at US$1.0942 on Thursday, with no major European economic data to inject volatility, taking its fall for the year to around 0.9 per cent.

Sterling was up 0.1 per cent at US$1.2811, rising 0.6 per cent for the year.

Bitcoin continued its upward march, hitting a record US$73,803. Exchange-traded Bitcoin funds and optimism that the Fed will cut interest rates this year have boosted the biggest cryptocurrency.

Against the Japanese yen, the greenback strengthened 0.19 per cent at 148.02.

The Japanese currency briefly strengthened against the US dollar, after Jiji news agency reported the Bank of Japan had started to make arrangements to end its negative interest rate policy at its Mar 18 to 19 meeting.

Investors have been pricing in the chance of a change in policy this month, particularly after news of big pay hikes from some of Japan’s biggest companies at this year’s annual wage negotiations.

Preliminary results of the spring wage negotiations are due on Friday, with several of the country’s biggest companies having already agreed to meet union demands for pay increases.

Elsewhere, the US dollar climbed 0.1 per cent against the Swedish krona, to 10.239 kronor, after data showed Sweden’s headline inflation slowed more than expected in February.

Market pricing on Thursday showed traders see a roughly 75 per cent chance of the Fed cutting rates by June. REUTERS