- U.S. retail sales fall more than expected
- U.S. industrial production rises
- U.S. dollar up; riskier currencies lose out
- Kiwi falls to three-week low
- Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
(Adds new comment, updates prices, Fed minutes outlook)
The dollar advanced for a second straight session on Tuesday, bolstered by safe-haven demand, as investors fretted about Afghanistan, a slowing Chinese economy, and the rapid spread of the Delta coronavirus variant which forced some lockdowns.
The overall tone in financial markets was one of caution, with shares on Wall Street in the red. A much sharper decline than expected in Tuesday's U.S. retail sales curbed gains in the dollar, but that was offset by the higher-than-forecast rise in industrial production, which accelerated the greenback's gains.
"This morning's retail sales report served to confirm that the U.S. consumer - the world's biggest and most dependable customer - is becoming more cautious," said Karl Schamotta, chief market strategist at Cambridge Global Payments in Toronto.
"This, combined with evidence of a slowdown in the Chinese economy and ongoing political turmoil in Afghanistan, is driving investors to pay off dollar-funded borrowing positions and pull money out of high-risk markets," he added.
The Afghan Taliban said on Tuesday they wanted peaceful relations with other countries and would respect the rights of women within the framework of Islamic law, as they held their first official news briefing since their shock seizure of Kabul.
Many investors, however, were not comforted by the Taliban's conciliatory tone. In afternoon trading, the U.S. dollar index rose 0.6% to 93.119 =USD . The euro, the biggest component in the dollar index, fell 0.6% to $1.1709 EUR=EBS .
The New Zealand dollar, meanwhile, tumbled to its lowest in three weeks after the country identified its first COVID-19 case since February, prompting the government to announce new short-term lockdown measures.
The currency fell sharply earlier in the global session after Prime Minister Jacinda Arden said Auckland - where the case was reported - would go into lockdown for seven days, while New Zealand as a whole will have the toughest level of lockdown for three days.
It was last down 1.7% at US$0.6904 NZD=D3 , after dropping to US$0.6900, the lowest since late July. The Australian dollar fell to a nine-month low after central bank meeting minutes were seen as dovish. It was last down 1.2% at US$0.7253 AUD=D3 .
The safe-haven Japanese yen was down against a firm dollar, which rose 0.3% to 109.56 yen JPY=EBS . The Swiss franc, another safe haven, also fell versus the dollar, which was last up 0.3% at 0.9149 franc CHF=EBS .
Investors are looking to Wednesday's minutes of the Federal Open Market Committee meeting last month, as several Federal Reserve officials have adopted a more hawkish outlook in recent weeks.
That hawkish view, however, does not take into account the most current data releases, which have come in weaker than expected, such as the poor confidence numbers amid the surge in Delta variant cases and the renewed rise in mitigation measures that could slow growth.
======================================================== Currency bid prices at 3:12PM (1912 GMT)Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Dollar index =USD 93.1180 92.6220 +0.54% 3.486% +93.1680 +92.6160 Euro/Dollar EUR=EBS $1.1712 $1.1776 -0.54% -4.14% +$1.1785 +$1.1709 Dollar/Yen JPY=EBS 109.5700 109.2600 +0.29% +6.05% +109.6500 +109.1200 Euro/Yen EURJPY= 128.34 128.64 -0.23% +1.12% +128.8700 +128.2700 Dollar/Swiss CHF=EBS 0.9149 0.9124 +0.28% +3.42% +0.9150 +0.9100 Sterling/Dollar GBP=D3 $1.3737 $1.3841 -0.74% +0.55% +$1.3845 +$1.3726 Dollar/Canadian CAD=D3 1.2622 1.2575 +0.38% -0.88% +1.2648 +1.2570 Aussie/Dollar AUD=D3 $0.7254 $0.7337 -1.15% -5.73% +$0.7341 +$0.7243 Euro/Swiss EURCHF= 1.0715 1.0746 -0.29% -0.85% +1.0752 +1.0702 Euro/Sterling EURGBP= 0.8525 0.8503 +0.26% -4.61% +0.8536 +0.8505 NZ NZD=D3 $0.6905 $0.7022 -1.67% -3.85% +$0.7029 +$0.6900 Dollar/DollarDollar/Norway NOK=D3 8.9045 8.8325 +0.88% +3.77% +8.9190 +8.8280 Euro/Norway EURNOK= 10.4315 10.4030 +0.27% -0.34% +10.4533 +10.3832 Dollar/Sweden SEK= 8.7562 8.6530 +0.65% +6.83% +8.7700 +8.6497 Euro/Sweden EURSEK= 10.2563 10.1904 +0.65% +1.79% +10.2714 +10.1850 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates https://tmsnrt.rs/2RBWI5Ekiwi dollar https://tmsnrt.rs/3iU3a8o
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