By Chuck Mikolajczak
NEW YORK, May 14 (Reuters) – The dollar climbed for a fourth straight day on Thursday, after economic data kept expectations intact that the Federal Reserve was unlikely to adjust interest rates this year, while investors awaited the upshot of talks between the U.S. and China.
The Commerce Department said retail sales rose 0.5% last month, matching the estimate of economists polled by Reuters, after a downwardly revised 1.6% jump in March.
“It’s very difficult for FX traders or investors in general to place bets right now when the outcomes from a fundamental standpoint haven’t shifted all that much,” said Karl Schamotta, chief market strategist at Corpay in Toronto.
“It’s remarkable the extent to which there was no surprise in today’s print… when we look at the fundamentals here, American consumers are still spending. They are telling pollsters that they’re more cautious, but at the same time, they’re not walking the talk, they’re spending as they have.”
Separately, the Labor Department said weekly initial jobless claims rose by 12,000 to a seasonally adjusted 211,000, slightly above the 205,000 estimate, indicating the job market remains stable.
In addition, the Labor Department said import prices increased 1.9% last month, well above the 1.0% estimate, after an upwardly revised 0.9% rise in March, with the cost of fuels posting the largest increase in four years. The increase comes after strong readings on both consumer and producer inflation earlier this week.
The dollar index, which measures the greenback against a basket of currencies, rose 0.14% to 98.60, with the euro down 0.13% at $1.1695. The greenback was on track for a fourth straight day of gains, its longest run since late March.
Markets have largely priced out any chance of a rate cut this year, with expectations for a hike in 2027 slowly increasing as the Iran war drags on, keeping oil prices elevated as the Strait of Hormuz remains largely shuttered, and recent comments from Fed officials flagging inflation concerns.
Kansas City Federal Reserve President Jeffrey Schmid said on Thursday that inflation is the biggest risk to a U.S. economy that has shown “remarkable resilience” in the face of numerous challenges, and the job market is stable.
The U.S. Senate on Wednesday approved Kevin Warsh as chair of the Federal Reserve and now awaits final White House signatures on paperwork sent by the Senate.
OIL PRICES STEADY AMID IRAN TENSIONS
U.S. crude rose 0.11% to $101.13 a barrel and Brent fell to $105.57 per barrel, down 0.06% on the day after Iran’s state media said about 30 vessels had crossed the Strait of Hormuz.
