Investing.com – The dollar traded higher against a basket of global currencies on Tuesday, buoyed by retail sales data that topped forecasts, pointing to a rebound in consumer spending, lifting expectations of solid economic growth in the second half of the year.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose by 0.39% to 93.73.
The Commerce Department said on Tuesday that retail sales rose 0.6% last month. That was the largest gain in seven months, ending four-consecutive months of lower than expected growth.
Also lifting sentiment on the dollar were comments from Bill Dudley on Monday, the New York Fed chief who is seen as an influential voice on the central bank’s policy-setting committee. Mr Dudley said he would favour a third rate hike this year, even as Wall Street expectations for such a move have dipped below 50%.
Meanwhile, safe-haven jitters continued to ease, as North Korean state media reported Tuesday that leader Kim Jong Un had delayed a decision on firing missiles towards the U.S. pacific territory of Guam, suggesting that his earlier threats were rhetorical.
In the wake of cooling tensions between the U.S. and North Korea, demand eased for safe-haven currencies such as the yen and Swiss franc, prompting the dollar to claw back recent losses.
USD/CHF rose to 0.9726, up 0.12% while USD/JPY rose 0.76% to Y110.47.
GBP/USD fell 0.76% to $1.2866, following data showing UK inflation undershot economists’ forecasts, cooling expectations the Bank of England would look at tapering its loose monetary policy measures sooner rather than later.
EUR/USD lost 0.36% to $1.1738, down 0.37%, after Germany, the Eurozone’s largest economy, reported weaker-than-expected growth in the second quarter.
USD/CAD added 0.28% to C$1.2758.