The US dollar index witnessed a slight decline during the closing trading of last week, but it is still stable near its highest levels in more than a year, after the release of a number of US economic data, most notably US retail sales data, which had a strong impact on its trading.
The following are the most prominent factors affecting the dollar's movements at the end of last week:
Dollar affected by the release of US retail sales data:
The US Census Bureau released US retail sales data for October on Friday, which saw some variation over the past month. According to the data, US retail sales grew by 0.4% in October, while markets had expected retail sales to grow by only 0.3%.
On the other hand, the core retail sales data came below market expectations, as core retail sales recorded a growth of 0.1% on a monthly basis during September, while market expectations indicated a growth of 0.3%, and this data negatively affected the dollar’s movements.
Federal Reserve members' statements negatively affect the dollar
The US dollar was hurt by statements from some Federal Reserve members who stressed that cutting interest rates is one of the options available at the bank's next meeting. In this context, Boston Fed member Susan Collins told the Wall Street Journal that cutting interest rates again at the December meeting is already on the table, but it is not yet a done deal. These statements had a negative impact on the dollar.
Expectations of a US interest rate cut affect the dollar
The dollar got some support as expectations of a sharp rate cut by the US Federal Reserve faded, with market bets on a 25 basis point rate cut at the next meeting standing at 62.1%. Meanwhile, expectations of a rate cut at the next meeting are stable at 37.9%, supporting the dollar.
The impact of these developments on the US dollar index
With these positive factors, the US dollar index witnessed a slight decline of 0.21%, settling at 106.64 points, and is awaiting any new developments that may affect its trading in the coming week.
