Dollar firms after retail sales data prompt recovery hopes

Dollar firms after retail sales data prompt recovery hopes

The dollar firmed against its peers on Wednesday after U.S. retail sales in May reported higher gains than forecasted. In Asia, risk currencies were under pressure due to the coronavirus and diplomatic tensions in the region.

The dollar index traded at 97.003.

The euro stood at 1.12635 on the dollar, while the Aussie fell 0.4% to $0.6861.

In Asia, investors were in a risk-off mood as Beijing strengthened its restrictions on the capital to control a serious rise in new coronavirus cases and to halt its spread to other cities and provinces. 

North Korea blew up a joint liaison office in a border town with South Korea, while the Indian army said that 20 of its soldiers had been killed in encounters with Chinese troops at a disputed border site in the Himalayas. 

The dollar steadied at 107.39 against the Japanese yen.

On Tuesday, the jump in U.S. retail sales made up for 63% of the record declines in March and April, showing a recovery in consumer spending.

However, Fed Chairman Jerome Powell said that the U.S. economy will not fully recover until the virus has been contained.

This week six U.S. states reported record highs in new cases, hinting that recovery is still far from certain. 

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