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Dollar edges higher on strong data, despite lower yields

3 minute read

A U.S. Dollar banknote is seen in this illustration taken May 26, 2020. REUTERS/Dado Ruvic/Illustration

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  • Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

NEW YORK, April 15 (Reuters) - The dollar index edged higher on Thursday in choppy trading as investors balanced bullish data showing U.S. retail sales rebounded sharply in March against a continued drop in U.S. Treasury yields.

Retail sales increased 9.8% last month, the Commerce Department said on Thursday, beating economists' expectations for a 5.9% increase.

A separate report also showed that initial claims for state unemployment benefits totaled a seasonally adjusted 576,000 for the week ended April 10, compared with 769,000 in the prior week. Economists polled by Reuters had forecast 700,000 applications in the latest week. read more

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“This was a one-two punch of really positive data,” said Edward Moya, senior market analyst at OANDA in New York.

Dollar strength was capped, however, as Treasury yields dropped to one-month lows, reducing the relative attractiveness of the U.S. currency.

The dollar index earlier on Thursday hit a one-month low of 91.487, before rebounding to 91.633, up 0.03% on the day.

The euro fell 0.07% to $1.1971. The greenback fell 0.15% to 109.73 Japanese yen .

The dollar has been on the back foot this month as Treasury yields stabilize below one-year highs reached last month. Yields have fallen as the U.S. Federal Reserve reiterates its commitment to holding rates near zero for years to come, and on some concerns that a recent uptick in inflation will be temporary.

Strong risk appetite as stocks hit record highs is also seen as denting the appeal of the greenback.

The Australian dollar , a proxy for global risk sentiment, rose 0.36% on Thursday to $0.7749.

Rising geopolitical tensions may be helping demand for safe-haven U.S. bonds on Thursday.

“We’re seeing more risks across emerging markets right now, and that’s probably going to keep some Treasury demand going,” said Moya.

The Russian rouble tumbled on Thursday, at one point losing 2% to the dollar in volatile trade and hitting a more than five-month low versus the euro as the White House announced new sanctions targeting Russia's sovereign debt. read more

U.S. President Joe Biden on Thursday authorized the move to punish Moscow for interfering in the 2020 U.S. election - allegations Russia denies. read more

Bitcoin stood near a record high of $64,895 reached on Wednesday, when cryptocurrency platform Coinbase (COIN.O) made its debut in Nasdaq in a direct listing. It was last up 0.07% on the day at $63,028. read more


Currency bid prices at 9:46AM (1346 GMT)

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Reporting by Karen Brettell; additional reporting by Ritvik Carvalho in London; editing by Jonathan Oatis

Our Standards: The Thomson Reuters Trust Principles.

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