FOREX-Dollar at 16-month high after strong U.S. retail sales data

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* Euro versus dollar at 16-month low

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* Graphic: World FX Rates (Changes dateline from London to New York; updates prices after US retail sales data; adds analyst comments)

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NEW YORK, Nov 16 (Businesshala) – The dollar rose to a 16-month high on Tuesday after US consumers saw rising prices and increased retail sales compared to the previous month, even as the euro rose on concerns about a rise and bounce. fell between Cases of covid 19.

US retail sales rose 1.7% in October, which topped consensus expectations of a 1.4% increase, likely as Americans rush their holiday shopping early to avoid empty shelves amid shortages of some goods. started as the ongoing pandemic squeezes supply chains.

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“The data shows consumers continue to spend and spend despite rising prices and declining consumer morale,” said Fiona Cincotta, senior financial markets analyst at Citi Index.

“This would be an encouraging sign for the Fed,” she said.

As of 9:30 am Eastern Time, the dollar index was up 0.218% at 95.738, having touched 95.824 earlier, the highest level since July 2020.

The dollar rose as US inflation data last week showed consumer prices rose at the highest rate since 1990, prompting speculation that the Federal Reserve may raise interest rates sooner than expected. .

The euro extended losses against the dollar, down 0.22% at $1.13425. Earlier in the session, the single currency fell to $1.1330, its weakest since July 2020.

Marshall Gittler, head of investment research at BDSwiss Holding Ltd, said the euro’s decline is due to the dismal performance of the euro area economy relative to the United States, which has been more surprising than the euro area.

COVID-19 is on the rise again in Europe as well, causing some countries to consider reopening lockdowns, while the spread of the virus in the United States has stabilized for now, he said.

“As a result, the market is becoming increasingly nervous about the euro,” Gittler said.

Euro On Monday, European Central Bank President Christine Lagarde said a tightening of monetary policy to rein in inflation could affect the recovery of the euro area, pushing comments back on calls and as market bets for tougher policy. was seen in

“Markets are still assuming that the ECB is in a very different position and latitude to the Fed, hence concerns about this kind of rate-spread logic as well as the re-imposition of sanctions in the euro area… So much on the defensive,” said Jeremy Strache, head of G10 FX strategy at CIBC.

On Monday, Austria imposed a lockdown on people without vaccinations, while Germany’s parliament is to vote on Thursday on tougher measures to tackle the rising number of cases. France, the Netherlands, and many countries in Eastern Europe are also experiencing an increase in the number of infections.

“Fears that the situation could escalate and result in further tightening of sanctions in the coming months is hurting sentiment towards European currencies,” MUFG currency analyst Lee Hardman said in a client note.

The British pound was up 0.13% against the dollar at $1.3420, data that showed British employers hired more people after the government’s job-protecting furlough scheme ended in October.

Elsewhere, the cryptocurrency bitcoin fell below $60,000 for the first time since November 1. It was down 3.82% at $61,175.

Reporting by John McCrank in New York; Additional reporting by Elizabeth Howcroft in London; Editing by Giles Elgood, John Boyle and Jonathan Otis


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