Wednesday, as the greenback was boosted with the help of the strong United States retail sales data on Tuesday, the United States dollar held firm. According to the dollar index, against a group of its major currency rivals, the greenback was flat at 93.835 which were at its best stance above its 15-month low of 92.548 experienced earlier this month.
As the dollar recovers and with the reinforcement coming from the robust United States retail sales data, the chance of another Fed interest rate hike was once again reignited. In accordance to this, chief forex strategist at Mizuho Securities in Tokyo: Masafumi Yamamoto said that he cannot expect anything aggressive from the minutes, and that in the end, he thinks that the Federal Reserve will begin their interest rate hike as early as December of 2017.
The United States retail sales have risen to an approximate percentage of 0.6% in July, which was higher than the 0.4% in which economists’ are estimating. In addition, according to the New York Federal Reserve, an unexpected robust rise in an index on manufacturing activity in New York have also encouraged dollar investors, as the index jumped to 25.2 points in August and is considered as its highest level since September of 2014.
Masafumi Yamamoto also claimed that the greenback has still chances to gain further if investors and market participants began to price in higher likelihood of an interest rate hike. As of now, the Federal Reserve fund futures are showcasing a high chance of an expected interest rate hike this year.