(Up to date at 2:52 P.m. EDT/1852 GMT)
By Chuck Mikolajczak
NEW YORK, Sept 14 (Reuters) – The greenback index surged to a six-month excessive on Thursday, as financial knowledge was largely stronger than anticipated and the European Central Financial institution (ECB) signaled it was doubtless carried out with its rate of interest hike cycle.
U.S. retail gross sales elevated 0.6% in August, greater than the anticipated 0.2% rise, boosted by increased gasoline costs whereas weekly preliminary jobless claims rose to 220,000 however had been under the 225,000 forecast.
Rising gasoline costs additionally affected the most recent inflation knowledge, because the producer value index for remaining demand rose 0.7% final month, greater than the 0.4% estimate.
The greenback index was final up 0.64% at 105.41, simply off the 105.43 degree hit earlier within the day, its highest since March 9. The index was on monitor for its greatest one-day share achieve in simply over every week.
The euro slumped in opposition to the greenback after the ECB raised its key rate of interest to a file excessive of 4% on Thursday however indicated this was more likely to be its remaining transfer in a greater than year-long struggle in opposition to inflation because the euro zone economic system continues to battle. The euro was down 0.89% at $1.0635 after falling to $1.0629, its weakest since March 17 and on tempo for its greatest one-day share fall since July 27.
“(ECB President Christine) Lagarde is hinting that this might be the final hike as a result of she’s saying if we maintain charges right here for a sure time frame this can do the job kind of factor,” stated Erik Bregar, director, FX & treasured metals danger administration at Silver Gold Bull in Toronto.
“After which I believe each knowledge level this morning out of the US was higher than anticipated – jobless claims, retail gross sales, headline PPI – so it is type of like a double increase for the greenback right here.”
Regardless of the US financial knowledge, views for the Federal Reserve remained largely intact, with expectations the central financial institution will maintain charges regular on the conclusion of its Sept. 19-20 coverage assembly at 97%, in response to CME’s FedWatch Software, up barely from the 96% on Wednesday. Expectations for a 25 foundation level hike on the November assembly have shifted all the way down to 35.3% from 41% the prior day.
Sterling traded at $1.2418, down 0.68% on the day after falling to $1.2400, a three-month low and was poised for its greatest one-day share decline since Aug. 24. The greenback edged down 0.01% at 147.44 in opposition to the yen.
China’s offshore yuan weakened on Thursday after the Folks’s Financial institution of China stated it might reduce banks’ reserve requirement ratio by 25 foundation factors.
The greenback rose to as excessive as 7.2969 in opposition to the yuan traded offshore, and was final up 0.27% at 7.2907 on the day.
(Reporting by Chuck Mikolajczak; enhancing by David Evans and Richard Chang)