Dollar stabilizes after gains; sterling boosted by retail sales
Dollar stabilizes after gains:
The U.S. dollar slipped lower Friday, handing back some of the previous session’s gains on the back of strong retail sales, but remained on track for its third weekly gain in a row.
At 04:35 ET (08:35 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.2% lower to 103.495.
Dollar in demand
The dollar soared to an over 2-½ month high on Thursday following stronger-than-expected retail sales data, which added to recent signs of continued resilience in the US labor market.
This has resulted in traders largely inking in expectations for a 25 basis point cut by the Federal Reserve next month, a smaller cut than what the US central bank started the rate-cutting cycle in September.
The greenback has also received favor on raised expectations that Republican candidate Donald Trump wins the presidency next month, given the likelihood of dollar-supporting trade tariffs.
“We still think some de-risking into 5 November can lead to some defensive flows into the dollar,” said analysts at ING, in a note.
Sterling boosted by retail sales
Dollar stabilizes after gains: In Europe, GBP/USD gained 0.3% to 1.3049, after data released Friday showed British retail sales unexpectedly rose 0.3% in September, beating economists’ expectations for a monthly 0.3% fall.
Combined with stronger gains in July and August, sales rose by 1.9% rise in the third quarter, the joint largest increase since mid-2021.
“Still, growth data is of secondary interest for the BoE right now. This week’s surprise dip in services inflation is more important, suggesting back-to-back rate cuts are becoming more likely,” ING added.
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