Dollar Stronger On Upbeat U.S., China Economic Data
17 January 2020 - 7:36PM
RTTF2
The U.S. dollar drifted higher against its most major trading
partners in the European session on Friday, as solid economic data
from China and the U.S. eased concerns about global growth.
Official data showed that the Chinese economy expanded in line
with expectations in the fourth quarter.
Gross domestic product grew 6.0 percent year-on-year in the
fourth quarter, the same rate as seen in the third quarter and in
line with expectations.
Chinese industrial production and retail sales beat forecasts in
December, rising 6.9 percent and 8.0 percent, respectively
year-on-year.
Overnight data showed that U.S. retail sales rose 0.3 percent in
December, in line with forecasts.
Separate reports showed that weekly jobless claims unexpectedly
fell in the week ended January 11 and NAHB housing market index
came in near a 20-year high in January.
The data reduced the possibility of further interest rate cuts
from the Federal Reserve.
Investors await U.S. industrial production, consumer confidence
index, building permits and housing starts data due in the American
session for more direction.
The currency traded mixed against its major counterparts in the
Asian session. While it rose against the yen and the franc, it held
steady against the euro. Versus the pound, it declined.
The greenback rose to a 3-day high of 1.1106 against the euro
from yesterday's closing value of 1.1136. The greenback is likely
to locate resistance around the 1.10 level.
Final data from Eurostat showed that Eurozone inflation
increased as estimated in December.
Inflation rose to 1.3 percent in December, as initially
estimated, from 1 percent in November. A similar higher rate was
last seen in June.
The greenback strengthened to a 2-day peak of 0.9674 against the
franc, up from Thursday's closing quote of 0.9645. On the upside,
0.98 is possibly seen as the next resistance level for the
greenback.
Data from the Federal Statistical Office showed that
Switzerland's producer and import prices declined in December.
The producer and import prices fell 1.7 percent year-on-year in
December.
After falling to an 8-day low of 1.3119 versus the pound at 4:15
am ET, the greenback turned higher and was trading at 1.3053. The
greenback is seen locating resistance around the 1.28 mark.
Data from the Office for National Statistics showed that U.K.
retail sales declined unexpectedly in December.
Retail sales volume, including auto fuel, dropped 0.6 percent on
month, following a 0.8 percent decrease in November. This was the
fifth consecutive month of no growth.
The greenback appreciated to 0.6619 against the kiwi, from a low
of 0.6651 hit at 3:15 am ET. The greenback is likely to test
resistance around the 0.645 region, if it gains again.
The greenback that ended Thursday's trading at 1.3042 against
the loonie gained to a 2-day high of 1.3058. The currency may face
resistance around the 1.33 region.
The U.S. currency rose back to 0.6889 against the aussie, not
far from a 2-day peak of 0.6884 set in the Asian session. The next
possible resistance for the greenback is seen around the 0.66
level.
In contrast, the greenback eased off to 110.09 against the yen,
from an 8-month high of 110.29 seen in Asian trading. The greenback
is poised to challenge support around the 108.00 mark.
Data from the Ministry of Economy, Trade and Industry showed
that Japan's tertiary industry activity rose at a
faster-than-expected pace in November.
The tertiary industry activity index rose 1.3 percent
month-on-month in November. Economists had forecast 1.0 percent
rise.
Looking ahead, U.S. building permits, housing starts and
industrial production, all for December, as well as University of
Michigan's preliminary consumer sentiment index for January are set
for release in the New York session.
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