US Dollar Rising On Better Than Expected Economic Data

Washington (July 15)  The dollar is up against all of its major rivals Friday afternoon, but has pared its early gains against the Japanese Yen. Investors were confronted with a slew of US economic reports this morning, the results of which were mixed. However, traders appear to be focusing on the positives, like the stronger than expected reads on retail sales and industrial production, as well as the continued rise in consumer prices.

Suggesting strength in consumer demand, the  Commerce Department  released a report on Friday showing a much bigger than expected increase in US retail sales in the month of June. The  Commerce Department  said retail sales climbed by 0.6% in June compared to economist estimates for a 0.1% uptick.

Despite another jump in energy prices, the  Labor Department  released a report on Friday showing that US consumer prices rose by slightly less than expected in the month of June.  The Labor Department  said its consumer price index rose by 0.2% in June after rising by a matching 0.2% in May. Economists had expected prices to rise by 0.3%.

Manufacturing growth in  New York State  slowed to near stagnation levels in July, according to results of a survey conducted by a branch of the US central bank. The result was a surprise to economists, who had generally expected a less dramatic slowdown.

The move came as new orders contracted slightly in the month and as shipments flattened out.

The New York Federal Reserve said its  Empire State  Index, a gauge of manufacturing in  New York State  , came in at 0.6 in July. This was down from a level of 6.01 in the previous month.

Economists had expected the number to dip in the month. However, they had generally expected a much smaller decline, with the consensus calling for a reading of 5.0.

After reporting a pullback in US industrial production in the previous month, the  Federal Reserve  released a report on Friday showing that production rebounded by more than anticipated in the month of June. The report said industrial production climbed by 0.6% in June after falling by a revised 0.3% in May.

Economists had expected production to rise by 0.4% compared to the 0.4% drop originally reported for the previous month.

Partly reflecting notable growth in retail inventories, the  Commerce Department  released a report on Friday showing a slightly bigger than expected increase in business inventories in the month of May. The report said business inventories rose by 0.2% in May after inching up by 0.1% in April. Economists had expected another 0.1% uptick.

With high income households expressing concerns about the prospects for the economy, the  University of Michigan  released a report on Friday showing a notable deterioration in US consumer sentiment in the month of July.

 The University of Michigan  said the preliminary reading on the consumer sentiment index for July fell to 89.5 compared to the final June reading of 93.5. Economists had expected the index to come in unchanged.

The dollar has climbed to around  USD1.1065  against the Euro Friday afternoon, from an early low of  USD1.1148  .

 Eurozone  inflation turned positive as initially estimated in June, final data from Eurostat showed Friday. Consumer prices edged up 0.1% in June from a year ago, offsetting a 0.1% fall in May. This was the first rise in five months.

The euro area trade surplus declined in May as the fall in exports exceeded the pace of decrease in imports, Eurostat said Friday. The trade surplus fell to a seasonally adjusted  EUR 24.5 billion  in May from  EUR 25.4 billion  in April. It was forecast to drop to  EUR 25 billion  .

The buck has also risen to around  USD1.3180  against the pound sterling this afternoon, from an early low of  USD1.3480  .

 UK  construction output declined in May after recovering a month ago, the  National Bureau of Statistics  said Friday. Construction output slid 2.1% in May from a month ago, reversing a 2.8% rise in April. It was forecast to fall 1.2%.

The greenback reached a 3-week high of  Y106.313  against the Japanese Yen this morning, but has since eased back to around  Y105.565 .

Source: RTTnews