US dollar rises following uptick in consumer spending

[NEW YORK] The US dollar rose against the euro, the yen and the pound on Monday as US Commerce Department data showed consumer spending had risen in July.

The rise in the dollar also followed a comparatively bullish outlook from US Fed chief Janet Yellen, who said Friday that justification for an interest rate hike was mounting.

Toward 2100 GMT, the euro was at US$1.1187, down from US$1.1195 Friday, while the dollar stood at 101.88 yen, up from 101.77.

The pound fell to US$1.3105 from US$1.3135 on Monday, a British bank holiday.

The Commerce Department reported Monday that US consumer spending in July had risen 0.3 per cent over June while core inflation had risen only 0.1 per cent. Personal incomes were up 0.4 per cent for the month.

Ms Yellen's remarks on Friday at the annual Jackson Hole symposium on monetary policy were seen as raising the likelihood of interest rate action this year, which can increase demand for US currency.

"Markets have repriced rate expectations accordingly, with the implied probability of a rate increase by the end of this year now firmly above 50 per cent," Erik Nelson of Wells Fargo wrote in a client note.

"The major currencies are broadly weaker in what is an otherwise light day for economic data and events."

AFP