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19/07/24
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USD Inches Up on Safety Bid
On Friday, the U.S. dollar was slightly higher, on track for a positive week, while sterling dropped after weak retail sales data was released.
The U.S. dollar index, which measures its strength against 6 other major currencies, traded up 0.2% at 104.065 after it rebounded from close to 4-month lows and set for its first weekly gain in three.
The dollar managed to bounce off recent lows as U.S. manufacturing and labor data added to questions about when the Federal Reserve would begin reducing rates.
The U.S. dollar has also experienced demand as a safe haven as relations between China and the U.S. deteriorate, and uncertainty about the U.S. presidential race increases, amid calls for President Joe Biden to step away from his reelection bid.
Analysts at ING said in a note if President Biden were to step aside, the dollar may come in slightly lower on the belief that Democrats would have a better chance of keeping the Senate and that there would be a ‘Trump Constrained’ scenario.
GBP/USD traded down 0.2% at about 1.2914, moving lower after rising to a one-year high earlier this week.
In June, U.K. retail sales dropped 1.2% versus an estimated 0.4% decline, indicating British consumers were feeling the pinch from high interest rates.
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