Dollar edges up on solid US retail sales report

[NEW YORK] The dollar advanced modestly on Thursday against the euro and other currencies after a solid US retail sales report sparked speculation that the Federal Reserve will soon lift benchmark interest rates.

US retail sales rose 0.6 per cent in July from June to US$446.5 billion, a slightly bigger increase than the 0.5 per cent gain projected by analysts.

The Commerce Department also raised its figures for June sales to unchanged from the prior estimate of a 0.3 per cent decline.

"Markets grew a bit more confident in the Fed raising rates this year after America's main economic engine, the consumer, stepped up spending," said Joe Manimbo, senior market analyst at Western Union Business Solutions.

"Market sentiment remained brittle amid still elevated concerns about China's slowing economy and depreciating currency, which should keep the dollar and its top peers on a volatile footing."

The dollar's gains Thursday made up for some of the losses Wednesday, when the US currency dropped on speculation that the Fed will delay hiking interest rates following China's devaluation of the yuan.

AFP