- U.S. data shows solid economic strength
- U.S., China trade deal seen as mildly negative for dollar
- Swiss franc continues to gain
(New throughout, updates prices, market activity and comments to U.S. market open, new byline, changes dateline, previous LONDON)
The dollar index erased earlier losses on Thursday after multiple data releases painted a positive U.S. economic picture, but remained slightly lower on the day after the United States and China made a preliminary deal to de-escalate their trade war.
The Commerce Department said on Thursday retail sales increased 0.3% last month. Data for November was also revised upward to show retail sales gaining 0.3% instead of rising 0.2%, as previously reported.
A gauge of manufacturing activity in the U.S. Mid-Atlantic region also rebounded in January to its highest level in eight months, and the outlook is the brightest in more than a year and a half, the Federal Reserve Bank of Philadelphia said.
Other data showed that the number of Americans filing for unemployment benefits fell more than expected last week.
“The data flurry was positive, particularly the Philly Fed number,” said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in New York. It “reduces the probability for a recession, which was low already.”
The dollar index .DXY was last 97.220, after falling to 97.085 overnight, which was the lowest since Jan. 8.
The dollar has weakened since the United States and China on Wednesday signed a deal in which China will boost purchases of U.S. goods and services by $200 billion over two years in exchange for the rolling back of some tariffs.
But 25% tariffs on a $250 billion array of Chinese industrial goods and components used by U.S. manufacturers, and China's retaliatory tariffs on over $100 billion in U.S. goods, will remain.
“For the dollar, it’s a mixed bag ... it should mean higher U.S. growth this year, but it also means higher foreign growth this year and less risks abroad, and that tends to pull capital out of the U.S. and be dollar negative,” said Anderson.
The Swiss franc CHF= continued to gain against the dollar, reaching 0.961 overnight, its strongest level since Sept. 2018.
The United States on Monday added Switzerland to its watch list of currency manipulators, which analysts say could discourage the Swiss National Bank (SNB) from intervening to try to limit further appreciation of the franc.
======================================================== Currency bid prices at 9:26AM (1426 GMT)Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar EUR= $1.1155 $1.1149 +0.05% -0.49% +1.1172 +1.1146 Dollar/Yen JPY= 110.0200 109.8800 +0.13% +1.07% +110.0600 +109.8600 Euro/Yen EURJPY= 122.74 122.52 +0.18% +0.65% +122.8600 +122.5100 Dollar/Swiss CHF= 0.9636 0.9641 -0.05% -0.43% +0.9650 +0.9614 Sterling/Dollar GBP= 1.3046 1.3036 +0.08% -1.61% +1.3074 +1.3026 Dollar/Canadian CAD= 1.3044 1.3041 +0.02% +0.45% +1.3048 +1.3032 Australian/Doll AUD= 0.6923 0.6902 +0.30% -1.40% +0.6933 +0.6901 arEuro/Swiss EURCHF= 1.0750 1.0748 +0.02% -0.94% +1.0759 +1.0734 Euro/Sterling EURGBP= 0.8548 0.8550 -0.02% +1.11% +0.8562 +0.8540 NZ NZD= 0.6658 0.6616 +0.63% -1.16% +0.6665 +0.6617 Dollar/DollarDollar/Norway NOK= 8.8738 8.8610 +0.14% +1.08% +8.8814 +8.8470 Euro/Norway EURNOK= 9.8997 9.8794 +0.21% +0.63% +9.9116 +9.8710 Dollar/Sweden SEK= 9.4645 9.4616 +0.07% +1.26% +9.4781 +9.4528 Euro/Sweden EURSEK= 10.5590 10.5519 +0.07% +0.86% +10.5735 +10.5460
