The dollar hit session highs against the euro and the yen on Wednesday, as stronger-than-forecast US retail sales figures for February fuelled optimism over the strengthening US economic recovery. US retail sales rose 1.1% in February, beating expectations for a 0.5% increase. Core retail sales, which exclude automobile sales, rose more-than-expected, climbing 1.0% compared to expectations for a 0.2% gain. During US morning trade, the dollar hit session highs against the euro, with EUR/USD dropping 0.73% to 1.2924. The euro remained under pressure after Italy saw the yield on three-year bonds rise to the highest level since December at the first auction of the country’s debt since a one-notch downgrade by Fitch’s ratings agency last week in the wake of inconclusive elections. The dollar erased losses against the yen, with USD/JPY rising 0.10% to 96.17, up from a session low of 95.45. The dollar weakened against the yen earlier Wednesday amid profit taking after the pair rose to fresh three-and-a-half year highs on Tuesday. The dollar was hovering close to two-and-a-half year highs against the pound, with GBP/USD edging up 0.10% to 1.4912. Data on Tuesday showing that U.K. manufacturing and industrial output slumped in February reinforced concerns over the possibility of a triple-dip recession and fuelled speculation that the Bank of England will restart its asset purchase program. The greenback hit session highs against the Swiss franc with USD/CHF advancing 0.44% to 0.9513. The greenback was higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD rising 0.15% to 1.0271, AUD/USD losing 0.18% to trade at 1.0304 and NZD/USD down 0.29% to 0.8243.
EasyForexNews Research Team