US dollar stronger on business activity index rise; sterling mixed

Story link: US dollar stronger on business activity index rise; sterling mixed

The US dollar was up in relation to the euro for the fifth trading session in a row on Thursday on continuing expectations that US interest rates will keep rising.

The Federal Reserve Bank of Philadelphia’s business activity index rose to 17.5 in August, above July’s 9.6 and also above its expected level of 12.3. The US dollar gained 0.8 percent in relation to the euro to $1.2174.

Besides its rise against the euro, the US dollar was also up in relation to the currencies of nations highly dependent on commodities as metals prices fell.

The greenback gained 0.7 percent on the Australian dollar to $1.7544, was up 0.6 percent to $0.6958 against the New Zealand dollar, and added $0.5 percent to C$1.2195 in relation to the Canadian dollar.

The US dollar also gained on the yen even though the Japanese currency has been buoyed by the decline in oil prices over the past couple of days, by gains in Japanese equities markets, and demand for the yen from foreign investors. The greenback was up 0.6 percent to ¥110.47 in relation to the yen. The Japanese currency, however, was able to gain 0.2 percent to ¥134.51 against the euro.

Meanwhile, sterling took some comfort in the fact that July’s retails sales in the UK did not fall as much as predicted in July, retreating only 0.3 percent rather than the 0.6 percent that had been expected. Sterling gained 0.2 percent to £0.6792 in relation to the euro; however it remained flat against the yen at ¥198.40 and lost 0.6 percent to $1.7956 in relation to the US dollar.