Sun, Aug 09, 2015 - Page 15 News List

US dollar bulls watching for full-time workers to fuel consumption spending

Bloomberg

More Americans are employed and they are receiving higher wages, so consumer spending may be the next signal that dollar strength has more room to run.

The US currency climbed the most in three weeks as a gain in monthly payrolls featured full-time jobs in the US reaching a six-year high while hourly earnings advanced. Last month’s retail sales are forecast to have bounced back from a June decline, adding to evidence that may prompt the US Federal Reserve to raise interest rates next month.

“With these numbers, we will start to see more of an advance because everyone is counting this as a validator for September,” Toronto-based Oanda Corp senior currency analyst Alfonso Esparza said by telephone. “The next milestone becomes retail sales.”

The Bloomberg Dollar Spot Index, which tracks the US currency versus 10 major peers, added 0.3 percent from a week earlier to 1,212.07 in New York. It touched a more-than-four-month high on Friday after the jobs report.

The currency added 0.2 percent against the euro and 0.3 percent versus the yen, its biggest gain in three weeks. This year, the dollar is up 10 percent versus the euro and has added 3.7 percent against Japan’s currency.

The British pound dropped the most in two weeks against the dollar as investors added to bets the Bank of England will lag behind the Federal Reserve when it comes to raising interest rates.

The pound fell 0.6 percent to US$1.5514 as of 2:49pm in New York, its biggest decline since July 23. Sterling weakened 0.7 percent to £0.7039 per euro. It touched £0.6936 on July 17, its strongest level since 2007.

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