US Dollar Index Declines Slightly Amid Retail Sales Data and Fed Comments

The US Dollar Index experienced a slight decline during trading on Friday, but it remains stable near its highest levels in over a year, following the release of several US economic data, particularly the retail sales data that had a strong impact on its trades.

Here are the main factors influencing the Dollar's movements today:

The Dollar is affected by US Retail Sales Data:

The US Census Bureau released the retail sales data for October today, which showed some variation during the past month. According to the data, US retail sales grew by about 0.4% in October, whereas the markets were expecting retail sales to grow by only 0.3%.

On the other hand, the data for the core retail sales index fell below market expectations, with core retail sales growing by only 0.1% month-on-month in September, while market expectations indicated a growth of 0.3%. This data negatively affected the Dollar's movements.

Comments from Federal Reserve Members Affect the Dollar Negatively

The US Dollar was impacted by comments from some Federal Reserve members who emphasized that a rate cut is one of the available options for the upcoming central bank meeting. In this context, Federal Reserve Bank of Boston member, Susan Collins, told the Wall Street Journal that a rate cut in the upcoming December meeting is indeed on the table; however, it is not yet decided, and these remarks had a negative impact on the Dollar.

Expectations of a US Rate Cut Affect the Dollar

The Dollar received some support as expectations for a sharp rate cut by the US Federal Reserve dissipated, with market bets for a 25 basis point rate cut in the next Federal Reserve meeting reaching 62.1%. Meanwhile, expectations for keeping rates unchanged in the next bank meeting stood at 37.9%. These expectations supported the Dollar.

Impact of These Developments on the US Dollar Index

With these positive factors, the US Dollar Index experienced a slight decline of 0.21%, settling at 106.64 points, and it is awaiting any new developments that could impact its trading in the upcoming week.

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