Forexpros – The dollar firmed in Asian trading on Tuesday, bolstered by healthy retail sales data that put to rest residual fears the Federal Reserve will stimulate the economy via easing measures.
The euro fell against the dollar in Asian trading Monday, with EUR/USD falling 0.18% and trading at 1.3119.
U.S. retail sales figures surprised markets across the globe, coming in much stronger at a seasonally adjusted 0.8% gain in March, according to the U.S. Commerce Department, beating expectations for a 0.3% gain.
February’s figure was revised down just slightly to a 1.0% gain from a previously reported increase of 1.1%.
Core retail sales, which are stripped of automobile sales, rose by 0.8% last month, above expectations for a 0.6% gain, after rising by 0.9% in February.
The news at first sparked demand for stocks and more attractive currencies, prompting investors to abandon the safety of the dollar and head out in search of risk.
However, the dollar regained strength on sentiment that strong sales will reduce the chance the Federal Reserve will roll out a new round of quantitative easing, which are asset purchases from banks that pump liquidity into the economy with the aim of creating more jobs.
The dollar weakens under such a scenario, and talk of such policy becoming less likely bolstered the greenback.
Uncertainty surrounding the fate of the Spanish economy pressured the greenback upwards, especially against the euro.
Spanish yields spiked to 6 percent earlier on fears the country is becoming a riskier play.
The greenback, meanwhile, was up against the pound, with GBP/USD down 0.07% and trading at 1.5890.
The U.S. currency was up against the yen, with USD/JPY trading up 0.04% at 80.45, and up against the Swiss franc, with USD/CHF trading up 0.18% at 0.9162.
The dollar was up against its counterparts in Canada, Australia and New Zealand, with USD/CAD up 0.07% at 1.0001, AUD/USD down 0.09% at 1.0347 and NZD/USD down 0.44% at 0.8176.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.09% at 79.80.
Later Tuesday, the U.S. government will release data on building permits as well as data on housing starts.
The country will also unveil data on industrial production and the capacity utilization rate, leading indicators of economic strength.
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