Dollar rises despite weak retail sales number

November 13, 2015 09:38 AM

The dollar moved higher against major currencies on Friday as U.S. retail sales fell short of forecasts but did not alter expectations the Federal Reserve may raise interest rates in December.

The 0.1 % gain in retail sales last month helped push the greenback up against the euro and other major world currencies as the weak number still looked sufficient to justify an expected Fed rate hike.

"The news overall was lackluster, but if you take in the context of the previous month (when retail sales also increased 0.1 %), it shows a little bit of constructive momentum," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.

"The takeaway here is that the market sees a high bar for the Fed not to raise rates next month and so, although today's numbers were underwhelming, it shouldn't keep fed from moving next month."

U.S. retail sales rose less than expected in October amid a surprise decline in automobile purchases, but the 0.1 % increase in month-over-month sales was enough to send the dollar higher against the euro, yen, pound and Swiss franc.

The dollar index, which measures the greenback against a basket of world currencies grew 0.4 %, moving it closer to ending the week in the black. The dollar has fallen this week as profit-taking on short positions sent it lower. For the week, the index is down about 0.2 %.

By Dion Rabouin

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