The US dollar rose against major currencies on Tuesday following better-than-expected retail sales data and anticipation of an interest rate cut by the Federal Reserve. The Commerce Department reported a 0.7% increase in November retail sales, driven by gains in motor vehicle and online purchases.
Markets expect the Fed to deliver a 25-basis-point interest rate cut at its policy meeting on Wednesday, with futures indicating a nearly 97% chance of a cut. This move is seen as a sign of underlying economic momentum.
The dollar edged lower against the Swiss franc but rose against the euro and pound sterling. The US dollar index gained 0.17%, while the euro dropped 0.24%. British wage growth data showed a stronger-than-expected increase, which may impact the Bank of England’s rate decision on Thursday.
In contrast, the yen strengthened against the dollar after markets scaled back expectations of a Bank of Japan rate hike this week. The yuan fell 0.06% due to dour expectations for Chinese economic growth. Other currencies like the Australian and Norwegian dollars also weakened against the US dollar.
Source: https://finance.yahoo.com/news/dollar-supported-bets-2025-rate-005958369.html