Summary Dollar strengthened against the euro on Friday after solid US economic data.
NEW YORK (AFP) - The dollar strengthened against the euro on Friday after solid US economic data supported the Federal Reserve s plan to raise interest rates, rebounding from a week in retreat.
Retail sales in June jumped 0.6 per cent, much better than expected, signaling stronger growth in consumer spending that drives about two-thirds of the US economy. Inflation held steady last month but a key core measure pointed to a slow pickup in price gains.
"Big day for US data, stronger than expected for the most part, especially in retail sales," said Vassili Serebriakov of Credit Agricole.
The dollar rose 0.7 per cent to US$1.1041 per euro. "The odds of a rate hike before the end of the year have been moving higher, so that s helping the dollar," Serebriakov said.
The Federal Reserve has not raised interest rates since December, but has been actively weighing doing so all year.
The pound, battered since Britain voted to leave the European Union three weeks ago, had resumed its slump against the dollar after a sharp rally Thursday following the Bank of England s unexpected decision to not cut rates following the Brexit vote.
The pound sank nearly one per cent to US$1.3174 on Friday.
"Sterling s best week in seven years may not be sustainable with expectations high for the BoE to chop rates to new lows as soon as its next meeting on Aug 4," said Joe Manimbo of Western Union Business Solutions.
