Dollar Subdued Amid Mostly Positive U.S. Data; Powell Testimony Eyed
The dollar was slightly lower against its rivals Monday, as in-line U.S. retail sales data, and slightly better than forecast regional manufacturing activity provided little impetus for upside in the greenback.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell by 0.14% to 94.31, down from a session high of 94.53.
The Commerce Department said on Monday that core retail sales rose 0.4% last month, compared with an upwardly revised 1.4% increase for May. The retail sales control group – which has a larger impact on U.S. GDP – came in at 0.0% missing expectations for a 0.4% rise.
The Empire State manufacturing index fell 2.4 points in July to a reading of 22.60, the New York Federal Reserve said Monday.
The dollar was also kept on the back foot by an uptick in safe-currencies like the yen and Swiss Franc amid fresh trade concerns after the U.S. filed complaints to the World Trade Organisation (WTO) against China, Canada, EU, Mexico and Turkey in response to retaliatory tariffs.
USD/JPY fell 0.07% to Y112.30, while USD/CHF fell 0.42% to 0.9975.
The subdued start to the week for the greenback comes as traders awaited further clues on monetary policy as Fed chairman Jerome Powell is expected to testify on the economy and monetary policy before the U.S. Senate Banking Committee on Tuesday.
Ahead of Powell's appearance, the Fed gave a positive assessment of the U.S. economy, insisting that strong labor markets and inflation would support the central bank's plan to continue with gradual rate hikes.
GBP/USD fell 0.02% to $1.3232, ahead of slew of data this week which could determine the prospect of an August Bank of England rate hike as average wage data is expected Tuesday, while inflation figures and retail sales are due later in the week.
EUR/USD rose 0.21% to $1.1711, while USD/CAD fell 0.24% to C$1.3131.