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Dollar at 16-month peak as focus turns to retail sales data

The safe-haven dollar hit a 16-month high against its major peers on Monday, fueled by global growth and inflation concerns, as well as monetary policy expectations, as investors awaited data this week on the strength of U.S. consumers.

The dollar surged on Wednesday after data showed U.S. consumer prices rose last month at the fastest annual pace since 1990, casting doubt on the Federal Reserve's view that price pressures will be transitory and fueling speculation that interest rates will be lifted sooner than previously thought.

The dollar index , which measures the currency against six peers, hit 95.462on Monday, its highest since July 2020, and was last up 0.274% at 95.394.

The euro hit a 16-month low against the greenback and was last down 0.49% at $1.13865.

Investors will look to U.S. retail sales data on Tuesday for clues as to where the dollar may be headed next. The data is expected to show retail sales rose 1.1% last month, according to a Reuters poll.

 

October retail sales are expected to be strong, showing economy is back on track

Economists predict a boom in October’s retail sales, aided by rising gasoline prices and early holiday shopping.

Retail sales are expected to rise 1.5%, up from September’s 0.7% gain, according to economists polled by Dow Jones. Excluding autos, sales are forecasted to rise 1%, compared to the 0.8% increase a month earlier, Dow Jones found.

The Census Bureau will release the retail sales report on Tuesday, Nov. 16 at 8:30 a.m. ET.

 

TREASURIES-Yields rise as corp supply calendar grows

Benchmark U.S. Treasury yields rose to three-week highs on Monday as companies rushed to sell debt before liquidity likely worsens during the holiday season and ahead of a U.S. government sale of new 20-year bonds on Wednesday.

Investment grade borrowers across multiple sectors tapped the debt market on Monday, with activity expected to slow next week, when markets will close on Thursday for Thanksgiving.

The 20-year bond yields rose 5 basis points to 2.04% while 30-year bond yields increased 5 basis pojnts to 2.01%.

Benchmark 10-year yields gained 4 basis points to 1.62% and are up from a one-month low of 1.42% last Tuesday.

Reference: CNBC, Reuters