NEW YORK: The US dollar drifted higher on Tuesday after data showed retail sales in April were lower than expected but the underlying trend remained resilient.
The dollar index was last slightly up on the day at 102.43. Against the yen, the greenback was also modestly higher at 136.155 yen
US retail sales rose less than expected in April, though the underlying trend remained solid, suggesting that consumer spending likely remained strong early in the second quarter.
“It was a rebound after two soft months, which suggests that consumer spending is still holding up,” said Vassili Serebriakov, FX strategist at UBS.
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“Consumer spending has been the strongest component of the economy at the moment. And we have seen business confidence indicators are much weaker than consumer indicators and this report is consistent with that.”
Currency investors though remained on tenterhooks amid a slew of event risks including an important meeting between US President Joe Biden and Republican House of Representatives Speaker Kevin McCarthy with a little more than two weeks to go before the US government could run short of money to pay its bills.
“There is maybe some potential news on the debt ceiling today. Chances are that this is going to be pushed closer to the deadline, which is early next month,” Serebriakov said.
“So the market should remain in a range. I don’t really see any direction impulse here.”
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