Dollar Pushes Higher Again on Sagging Growth, Rising Uncertainty

Friday,   15-Feb-2019   02:09 PM (IST)

The dollar was edging higher against major European currencies early Friday in Europe after weak Chinese inflation data overnight reinforced concerns about global growth. Fears about the growth outlook have revived this week in the wake of a shockingly sharp fall in U.S. retail sales in January, and there is still not enough evidence of progress in the trade talks between China and the U.S. to suggest that risk appetite will return quickly. At 03:00 AM ET (0800 GMT), the dollar index futures contract that tracks the greenback against a basket of major currencies was at 96.953. That’s just off a new two-month high of 97.067 that it hit overnight. The market hasn’t reacted much to news that Trump is set to declare a national emergency over border security after signing the spending bill hammered out earlier this week in Congress. While the immediate threat of another shutdown has been lifted, the precedent threatens to undermine a long-standing principle of Congressional oversight of spending and introduce more longer-term instability into U.S. politics. The euro was at $1.1278, down 0.2% and seemingly set to test a three-month low of $1.1218 later. The British pound was still struggling below $1.28 after another parliamentary defeat Thursday – albeit only a symbolic one, for Prime Minister Theresa May over her Brexit strategy. The two currencies will be sensitive Friday to U.K. retail sales data for January which will either confirm or buck a trend of data showing the economy stalling as Brexit approaches. In addition, European Central Bank board member Benoit Coeure is due to speak at 08:00 AM ET (13.00 GMT). Elsewhere, the dollar was higher against the growth-sensitive Aussie and Kiwi, and against higher-yielding currencies such as the Turkish lira and South African rand.