Dollar Scores Solid Gains Against Peers
The U.S. dollar firmed up against its peers on Friday as fairly upbeat economic data raised prospects of the Federal Reserve withdrawing stimulus sooner than anticipated.
Meanwhile, speculation is rife that U.S. President Joe Biden’s fiscal spending package will not be as large as the proposed $1.9 trillion.
The Commerce Department said personal income spiked by 10% in January after rising by 0.6 percent in December. Economists had expected personal income to soar by 9.5%.
The report also showed a significant rebound in personal spending, which surged up by 2.4% in January after falling by a revised 0.4% in December.
MNI Indicators released a report on Friday showing a bigger than expected slowdown in the pace of growth in Chicago-area business activity in the month of February.
The report said MNI Indicators’ Chicago business barometer dropped to 59.5 in February after jumping to a more than two-year high of 63.8 in January.
The dollar index rose to 90.97, gaining nearly 1%.
Against the euro, the dollar was stronger by over 0.8% at 1.2074.
The pound sterling weakened against the dollar, fetching $1.3924 a unit, more than 0.6% less than Thursday’s closing level.
The Yen slid to 106.56 a dollar, losing ground from 106.25. Industrial output in Japan was up a seasonally adjusted 4.2% on month in January, according to data released by the Ministry of Economy, Trade and Industry said.
Retail sales in Japan was down a seasonally adjusted 0.5% on month in January, coming in at 12.097 trillion yen. Overall consumer prices in the Tokyo region of Japan – considered a leading indicator for the nationwide trend – were down 0.3% on year in February, following the 0.5% decline in January.
The Aussie was weak with the AUD/USD quoting at 0.7702, falling from 0.7803
The Swiss franc weakened to 0.9085, down more than 0.4% from 0.9048 a dollar. Data from the State Secretariat for Economic Affairs showed that Switzerland’s economic growth eased sharply in the fourth quarter as the restrictions imposed to contain the coronavirus pandemic weighed heavily on the service sector.
Gross domestic product gained 0.3% sequentially, much slower than the 7.6% expansion seen in the third quarter. GDP was forecast to climb 0.1%.
The Loonie slipped to 1.2738 falling more than 1% from 1.2603. Data from Statistics Canada showed Canada’s industrial product price index rose 2% month-over-month in January, after rising by an upwardly revised 1.7% in December. The index surged 4% year-on-year in January, compared to an earlier reading of a 3.8%.
Meanwhile, Canada’s raw material price index was up 5.7% last month, after rising by 3.5% in December 2020.