Dollar index dwindles on disappointing data, pound extends gain

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Dollar index dwindles on disappointing data, pound extends gain

On Wednesday, the 16th of October 2019, the American dollar (DXY) fell against a basket of six major currencies, as another set of bleak economic data from US Department of Commerce had spooked the investors to seek safety on safe-haven currencies likes of Swiss Franc and Japanese Yen, while a dismal US retail sale in September alongside a decade-low manufacturing activity and a moderation of wage growth had been pointing towards a technically recessed US economy and building a stronger case for a divided Federal Reserve to slash interest rate again later this month.

In point of fact, Wednesday’s (October 16th) market had witnessed a sharp reversal of investors’ sentiment towards an overvalued US dollar, while following release of US retail sales which had faced off a shrinkage for the first time in seven months, the US Dollar index measured against a basket of six major currencies fell by 0.30 per cent to 97.99.

Aside from that, on Wednesday’s (October 16th) market closure, the Great Britain Pound rose 0.34 per cent against US Dollar, but gains were largely capped by a number of befuddling Brexit headlines in the British media.

Meanwhile, following Wednesday’s (October 16th) bleak economic data, the American dollar shed 0.10 per cent against Japanese yen, while another safe-haven currency, Swiss Franc, demand of which traditionally gears up during times of financial and geopolitical turmoil, added 0.39 per cent against the US dollar.

Besides, adding that US retail sales data on September, which had been a critical indicator to the volume of sales during holiday seasons, had been pointing towards an inevitable slowdown to US economy alongside a much-lower-than-anticipated consumer spending during holiday seasons amid China tariff hike and an upcoming additional duties on EU goods worth of up to $7.5 billion, a senior US economist at Capital Economics, Michael Pearce wrote in a client note, “Overall, the retail sales figures support our view that economic growth is slowing. ”