US data increases chances of further tapering
The US dollar performed well on the whole this week, with an improving economic outlook increasing investor optimism. After an apprehensive start, the retail sales figure from the country easily beat expectations to trigger gains for the US currency against most of its major partners, although not against sterling. A further raft of positive data on Wednesday added to the dollar’s strength, as the December producers’ price index registered its highest rate of growth in six months with a 0.4% increase from the November figure, while the Empire State manufacturing index also presented a strong expansion. This series of strong data contribute to suggestions that the US Federal Reserve will increase tapering of its quantitative easing programme at its next meeting. Inflation data released stateside yesterday remained below the 2% target set by the Federal Reserve, underlining the rhetoric of holding interest rates at their current low, while unemployment figures were as expected. Combined, these factors caused a fall of the US dollar against the Japanese yen. Today provides another large selection of data to mull over, the most significant being the building permits figure and the preliminary consumer sentiment figure from the University of Michigan. Call your trader now for the latest US dollar rates as positive data aids the currency.