WASHINGTON (dpa-AFX) - The U.S. dollar gained against its major rivals on Tuesday as surging coronavirus cases of the delta variant, and geopolitical concerns pushed up the demand for the safe-haven currency.
A disappointing U.S. retail sales data limited the greenback's uptick.
Data from the Commerce Department showed that retail sales slumped by 1.1% in July after climbing by an upwardly revised 0.7% in June. Economists had expected retail sales to dip by 0.3% compared to the 0.6% increase originally reported for the previous month.
Meanwhile, industrial production in the U.S. increased by much more than expected in the month of July, according to a report released by the Federal Reserve on Tuesday.
The Fed said industrial production advanced by 0.9% in July after edging up by a downwardly revised 0.2% in June. Economists had expected industrial production to rise by 0.4%, matching the increase originally reported for the previous month.
During his speech at a virtual event held by the central bank, Jerome Powell said, 'It's not yet clear whether the Delta [coronavirus] strain will have important effects on the economy; we'll have to see about that.'
The dollar index climbed to 93.17, gaining about 0.6%.
Against the Euro, the dollar firmed to $1.1711, gaining from $1.1777. A flash estimate from Eurostat showed the euro area economy recovered from a technical recession in the second quarter. Gross domestic product grew 2% sequentially, in contrast to a 0.3% drop in the first quarter.
On a yearly basis, GDP rebounded 13.6% after shrinking 1.3% in the first quarter. The annual rate was revised down from 13.7%.
The Pound Sterling was weak as well, fetching $1.3737 a unit, as against $1.3842 Monday evening. The UK unemployment rate dropped 0.2 percentage points to 4.7% in the second quarter, data from the Office for National Statistics showed. This was slightly below the expected rate of 4.8%.
Against the Yen, the dollar strengthened, fetching 109.60 yen a unit, rising from 109.27.
Against the Aussie, the dollar firmed to 0.7254 from 0.7338. Minutes from the Reserve Bank of Australia's August meeting showed that the Board is prepared to act if the recent surge in delta virus strain threaten the country's economic recovery.
The Swiss franc weakened to 0.9150 a dollar, from 0.9125, while the Loonie eased to 1.2624 from 1.2575. Data released by Canada Mortgage and Housing Corporation showed housing starts in Canada declined 3.2% over a month earlier to 272,176 units in July. It was slightly lower than what the market had expected, and the lowest reading since last December.
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