The U.S. dollar fell on Thursday as traders digest a slew of mixed economic data to gauge the outlook for the Federal Reserve’s interest rate cuts this year.
U.S. retail sales rose 0.4% last month after upward revisions the previous month, data from the Commerce Department’s Census Bureau showed.
Meanwhile, the number of Americans filing new applications for unemployment benefits increased more than expected last week, but remained at levels showing a healthy labor market.
The Philadelphia Fed Business Index, which jumped to 44.3 in January, was the lone surprise as the forecast was for a reading of minus 5.
The U.S. dollar index – a measure of the value of the greenback relative to a basket of foreign currencies – pared earlier gains and was last down 0.09% at 108.92.
“I think retail sales didn’t really have a significant impact,” said Vassili Serebriakov, FX strategist, at UBS Investment Bank.
“CPI had an impact initially in terms of weakening the dollar, but that was quickly reversed. And I think that just indicates that the market is still strongly biased to buy the dollar on dips, probably in anticipation of the inauguration next week, and the potentially dollar-supportive policies of the incoming Trump administration, including the possibility that tariffs will be raised relatively quickly.”
Donald Trump returns to the White House next week, and analysts expect some of his policies to boost growth as well as increase price pressure
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[ Legal advisor- OG markets ]
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