U.S. Dollar Rises on Retail Sales Data; Pound Near Two-years Low

Investing.com - The U.S. dollar rose on Wednesday in Asia on the back of the release of strong retail sales data, while the pound traded near two-years low on Brexit concerns.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, gained 0.4% to 96.922 by 1:24 AM ET (05:24 GMT).

Retail sales rose 0.4% in June, the Commerce Department reported on Tuesday, compared to expectations for a slight gain of 0.1%.

The stronger-than-expected retail sales showed the economy was healthy and tempered expectations of aggressive policy easing by the Federal Reserve later this month.

Meanwhile, the pound inched up 0.1% against the U.S. dollar but still traded near its lowest level in two years amid concerns of a no-deal Brexit.

Both Prime Minister candidates Jeremy Hunt and Boris Johnson have voiced their opposition to an Irish backstop agreement, making it even more likely that the U.K. will leave the European Union on Oct. 31 without a deal.

The GBP/USD pair last traded at 1.2415, up 0.1%.

Weak economic data and reports the Bank of England could cut interest rates instead of raising them as previously expected were also cited as headwinds for the pound.

"The euro has been weighed by the long struggling pound, which in turn is likely to suffer from Brexit-related woes until the Conservative party leader is decided next week," said Yukio Ishizuki, senior currency strategist at Daiwa Securities.

The AUD/USD pair slipped 0.1% after U.S. President Donald Trump said it is still a long way to go before Washington and Beijing could reach a trade deal.

The Aussie dollar is sensitive to the economic developments of China, Australia's largest trading partner.

Related Articles

China Treasuries Drop, Powell Keeps Pledge, Wage Growth: Eco Day

Dollar firm on upbeat U.S. data; pound and euro hit the skids

Crypto Currencies Fall as Facebook Faces Congress Over Libra