U.S. Dollar Strengthens After Solid Economic Reports
February 16 2018 - 4:38AM
RTTF2
The U.S. dollar strengthened against its major counterparts in
the European session on Friday, as encouraging U.S. reports on
housing starts, building permits and import prices for January
underscored expectations that the Federal Reserve will hike
interest rates in March.
Data from the Commerce Department showed that U.S. housing
starts rebounded much more than anticipated in the month of
January.
The Commerce Department said housing starts soared by 9.7
percent to an annual rate of 1.326 million in January after
tumbling by 6.9 percent to a revised 1.209 million in December.
Economists had expected housing starts to climb by 3.5 percent
to an annual rate of 1.234 million.
Building permits, an indicator of future housing demand, also
surged up by 7.4 percent to an annual rate of 1.396 million in
January from the revised December rate of 1.300 million.
The Labor Department report showed that U.S. import prices
jumped more than expected January, while export price growth also
exceeded estimates.
The Labor Department said import prices surged up by 1.0 percent
in January after edging up by a revised 0.2 percent in
December.
Economists had expected import prices to climb by 0.6
percent.
The report also said export prices increased by 0.8 percent in
January after inching up by a revised 0.1 percent in December.
Export prices had been expected to rise by 0.3 percent.
The currency was trading in a negative territory in the Asian
session.
The greenback advanced to 0.7924 against the aussie, 0.7386
against the kiwi and 1.2532 against the loonie, reversing from its
early 2-week low of 0.7988, 6-1/2-month low of 0.7437 and an 11-day
low of 1.2451, respectively. The next possible resistance for the
greenback is seen around 0.77 against the aussie, 0.72 against the
kiwi and 1.28 against the loonie.
The greenback firmed to 0.9249 against the franc, from near a
3-year low of 0.9188 hit at 4:30 am ET. On the upside, 0.95 is
likely seen as the next resistance for the greenback.
The greenback rose to 1.4005 against the pound, after having
fallen to an 11-day low of 1.4145 at 11:45 pm ET. The greenback is
seen finding resistance around the 1.38 level.
Figures from the Office for National Statistics revealed that UK
retail sales grew less than expected in January.
Retail sales rose 0.1 percent month-on-month in January,
reversing a 1.4 percent drop in December. Economists had forecast a
0.5 percent rise.
The greenback hit a 2-day high of 1.2430 against the euro, off
its early more than a 3-year low of 1.2555. Further uptrend for the
greenback is likely to see it finding resistance around the 1.23
mark.
Data from Destatis showed that Germany's wholesale price
inflation accelerated slightly in January, after easing in the
previous three months.
Wholesale prices climbed 2.0 percent year-over-year in January,
faster than the 1.8 percent rise in December.
The greenback was trading in a positive territory against the
yen with the pair trading at 106.23. This may be compared to a
15-1/2-month low of 105.55 hit at 11:15 pm ET. If the greenback
extends rise, 108.00 is seen as its next resistance level.
The University of Michigan's preliminary consumer sentiment for
February is due at 10:00 am ET.
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