NEW YORK: The dollar edged higher on Friday, on track for a weekly gain and supported by upbeat retail sales data boosting expectations that economic growth accelerated in the second quarter.
The dollar index, which measures the greenback against a basket of six currencies, was 0.157pc higher at 92.718. The index is on pace to log a gain of 0.6pc this week, its biggest weekly rise in about a month.
US retail sales unexpectedly increased in June as demand for goods remained strong even as spending was shifting back to services.
Solid US data and a shift in interest rate expectations after the Federal Reserve flagged in June sooner-than-expected hikes in 2023 have helped lift the dollar in recent weeks and made investors nervous about shorting it.
Friday’s gains for the dollar came despite Fed Chair Jerome Powell reiterating on Thursday that rising inflation was likely to be transitory and that the US central bank would continue to support the economy.
“The data was consistent with the economy making substantial strides and cements expectations of very robust second quarter growth of around 10pc,” said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
“A backdrop of rising inflation, falling unemployment and a resilient consumer makes a compelling case for the Fed to unwind stimulus,” Manimbo said.
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