The greenback rises against other major currencies on Tuesday as tensions between the US and North Korea continue to wind down, and as markets anticipate the release of the country’s data later in the day.
With North Korean leader Kim Jong-un deciding to put off plans to release a missile close to the US territory of Guam, investors were able to recover their sentiment towards riskier assets.
Some traders said that the dollar’s gains were also driven by the statement from Federal Reserve New York President William Dudley, saying that he would support another interest rate hike this year if economic conditions improved the way he expected it to be.
Meanwhile, analysts expect that US retail sales to increase by 0.3 percent in July against the 0.2 percent decline in June, while core retail sales going up by 0.3 percent could also help boost the dollar.
The US dollar index, a mean to measure the greenback against six other major currencies, edged 0.6 percent higher to 94.06.
The dollar kept its gain against the yen, as it climbed 1.06 percent to 110.80, backing away from a low 108.72 on Friday, its lowest since April 19.
Currency strategist Masashi Murata said that the greenback will probably trade mostly in the range of around 109 to 111 in the near term.
Sim Moh Siong stated that if the issue with North Korea keeps on settling down, then it may be possible to leave some room for the USD/JPY to increase, possibly to 111, or as far as 112.
The greenback also recovered from earlier losses against the Swiss franc, with a 0.2 boost to 0.9741. Both the yen and Swiss franc fell earlier, following North Korea’s decision to postpone the firing of missiles at the American territory of Guam.
The US dollar was also optimistic against the Canadian dollar as it gained 0.2 percent to 1.2758, the same goes with New Zealand dollar, lifting 0.5 percent to 1.3795.
Other high-earning currency, including the Australian dollar, was trading less by 0.4 percent to 0.7817 against the greenback. The kiwi also lost 0.5 percent to 0.7244 against the dollar.
UK’s Steady Inflation Pulls Euro and British Pound Down
Both the euro and the pound declined against the dollar on Tuesday after data showed that UK’s annual inflation rate was unexpectedly steady in July.
So far, the euro is down 0.6 percent to 1.1700, while pound sterling fell 0.8 percent to 1.2851 against the greenback.
On a year to year basis, Britain’s consumer prices remained unchanged at 2.6 percent, the same growth presented in June, missing economists’ estimates of 2.7 percent. Monthly consumer costs edged lower by 0.1 percent in July, although it was expected to stay flat.
Core inflation, excluding volatile food and energy prices, were also the same at 2.4 percent which was less than analysts’ forecast of 2.5 percent.
The retail price index, the level used by the government to set fare raise, was up from last month’s 3.5 percent to 3.6 percent in July. Economists expected it to remain unchanged.