Yahoo Finance Forex- Dollar Falls as Chances of Fed Cut Rise
Investing.com - The U.S. dollar was lower on Wednesday as retail sales fell for the first time in seven months in September, increasing chances of the Federal Reserve cutting interest rates later this month.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.1% to 97.928 as of 11:02 AM ET (15:02 GMT).
Retail sales dropped 0.3% as consumers cut back on spending. It was the first drop since February, suggesting that the weakness visible all year in manufacturing is spreading to other sectors of the economy.
The chance of a Fed rate cut in October rose to 88.2%, compared to 73.8% on Tuesday, according to Investing.com's Fed Rate Monitor Tool. That was caused in part by comments from Chicago Fed President Charles Evans arguing for the Fed to be aggressive enough to get some "momentum" into inflation.
Trade tensions also weighed, as uncertainty remained despite a temporary truce between the U.S. and China. The International Monetary Fund warned on Tuesday that the U.S.-China trade war would cut 2019 global growth to its slowest pace since the financial crisis. The organization said that more details on Trump’s Phase 1 trade deal were needed.
Meanwhile, sterling hit a five-month high before retracing slightly as traders held on to hopes that a Brexit breakthrough will be reached today.
European Council President Donald Tusk said they would know in the evening when Brexit will happen. The official deadline is October 31, but there is now no chance of a legal text being agreed at this week's summit, according to Tusk's previous statements.
GBP/USD gained 0.2% to 1.2806 while EUR/USD was up 0.2% to 1.1045.
Elsewhere, the Turkish lira strengthened slightly on reports that Turkish President Recep Tayyip Erdogan had agreed after all to meet vice-president Mike Pence on Thursday to discuss his country's invasion of northern Syria. Erdogan had said earlier he wouldn't agree to U.S. calls for a ceasefire.
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