PT Solid Gold Berjangka | Dollar strengthens following strong U.S. data and ECB rate hike
Dollar retained its gains against peers on Friday, following strong U.S. economic data and a rate hike by the European Central Bank (ECB). The currency’s strengthening came in response to higher-than-expected U.S. retail sales and an ECB decision that prompted a drop in European yields.
U.S. retail sales for August were boosted by higher gasoline prices, resulting in a 0.6% month-on-month increase, surpassing the estimated rise of 0.2%. This positive economic data contributed to the dollar’s strength, with the U.S. dollar index reaching close to Thursday’s six-month peak of 105.430.
On Thursday, the ECB raised rates to a record high of 4%, however, it signaled that this might be the end of its rate-hiking cycle as economic growth slows down. The ECB statement noted that the key interest rates have reached levels which, if sustained for a sufficiently long duration, will contribute significantly to inflation returning to target levels.
Following the ECB’s decision, which was characterized as a dovish hike by markets, the euro hit a multi-month low of $1.0632 against the dollar, while European Government Bond (EGB) yields finished 3-6 basis points lower.
Source: Investing.com
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