The US dollar edged higher on Friday to post a weekly gain, supported by upbeat retail sales data boosting expectations that economic growth accelerated in the second quarter.
The US dollar index, which tracks the greenback versus a basket of six currencies, rose 0.1 percent to 92.71, up 0.63 percent from a week earlier — its biggest weekly rise in about a month.
US retail sales unexpectedly increased last month as demand for goods remained healthy even as spending was shifting back to services.
Photo: Reuters
Solid US data and a shift in interest rate expectations after the US Federal Reserve last month flagged sooner-than-expected hikes in 2023 have helped lift the US dollar in the past few weeks and made investors nervous about shorting it.
Friday’s gains for the greenback came despite Fed Chairman Jerome Powell on Thursday reiterating that rising inflation was likely to be transitory and that the US central bank would continue to support the economy.
“The data was consistent with the economy making substantial strides and cements expectations of very robust second quarter growth of around 10 percent,” said Joe Manimbo, a senior market analyst at Western Union Business Solutions in Washington.
“A backdrop of rising inflation, falling unemployment and a resilient consumer makes a compelling case for the Fed to unwind stimulus,” Manimbo said.
In Taipei, the New Taiwan dollar dropped against the US dollar on Friday, losing NT$0.113 to close at NT$28.005, but gained 0.29 percent from a week earlier. Turnover totaled US$1.208 billion during the trading session.
The New Zealand dollar gained 0.37 percent after data showed that New Zealand’s consumer prices rose far faster than expected, prompting some in the market to bet on a rate hike as soon as next month.
Sterling edged lower against the US dollar as investors sought safety in the greenback amid concerns over rising COVID-19 cases globally.
The Canadian dollar climbed 0.1 percent, helped by upbeat domestic wholesale trade data, a day after touching a near three-month low against its US counterpart.
Cryptocurrencies found support after recent turbulence, with bitcoin about flat on the day at US$31,835.59.
Additional reporting by CNA, with staff writer
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