Despite better-than-expected retail sales and industrial production figures for September, the U.S. dollar ended nearly flat in late trading on Tuesday. The dollar index, measuring the greenback against six major peers, was down 0.002 percent to 106.2464 in late trading.
According to the advance report from the U.S. Commerce Department, U.S. retail sales rose 0.7 percent in September, surpassing the estimated 0.3 percent increase. Gas station sales played a significant role in boosting the headline number, experiencing a 0.9 percent rise as pump prices accelerated.
On Tuesday, Thomas Barkin, the chief of the Richmond Federal Reserve Bank, stated that higher long-term borrowing costs are exerting downward pressure on demand, but it remains uncertain how this will impact the central bank’s rate decision in two weeks. Barkin expressed his concerns, saying, “Longer-term rates have moved up, that’s certainly tightened financial conditions… The question is how much of this softening is feeding through to inflation. The path for inflation isn’t yet clear.”
Higher US Treasury yields and growing expectations of a more hawkish Federal Reserve may limit the downside for the US dollar. The odds of a hike by the Fed in December rose to nearly 42 percent, as reported by the CME FedWatch Tool.
Statistics Canada announced that the Canadian consumer price index (CPI) rose 3.8 percent year-on-year in September, a sharp decrease from August’s 4.1 percent and below the expected reading of 4.0 percent.
In late New York trading, the US dollar increased to 1.3646 Canadian dollars from 1.3617 Canadian dollars. Meanwhile, the euro rose to 1.0570 US dollars from 1.0554 US dollars in the previous session, while the British pound fell to 1.2174 US dollars from 1.2212 US dollars.
The U.S. dollar bought 149.7680 Japanese yen, compared to 149.5270 Japanese yen in the previous session. Additionally, the U.S. dollar rose to 0.9005 Swiss francs from 0.9003 Swiss francs and increased to 10.9252 Swedish krona from 10.9178 Swedish krona.
