Dollar Rises To 6-month High On Strong Economic Data

(RTTNews) - The U.S. dollar climbed higher on Thursday thanks to upbeat economic data, and on the European Central Bank signaling a likely halt to its rate hike cycle.

Data released by the Commerce Department said retail sales climbed by 0.6% in August after rising by a downwardly revised 0.5% in July. Economists had expected retail sales to inch up by 0.2% compared to the 0.7% increase originally reported for the previous month.

The bigger than expected increase in retail sales was largely due to higher gas prices, however, as sales rose by just 0.2% excluding sales by gas stations.

A separate report released by the Labor Department showed producer prices in the U.S. increased by more than expected in month of August. The report said the producer price index for final demand advanced by 0.7% in August after climbing by an upwardly revised 0.4% in July.

Economists had expected producer prices to rise by 0.4% compared to the 0.3% increase originally reported for the previous month.

The report also said the annual rate of producer price growth doubled to 1.6% in August from 0.8% in July. The annual rate of growth was expected to accelerate to 1.2%.

Another report released by the Labor Department showed first-time claims for U.S. unemployment benefits edged up by less than expected in the week ended September 9th. The report said initial jobless claims crept up to 220,000, an increase of 3,000 from the previous week's revised level of 217,000.

The dollar index, which climbed to a six-month high of 105.44, eased a bit to 105.33, but still remained quite strong, gaining about 0.55%.

Against the Euro, the dollar firmed to 1.0645 from 1.0732. The ECB raised its key interest rates for the tenth policy session in a row as rate-setters assessed the euro area inflation to remain "too high for too long", but signaled a pause, possibly a long one, in the tightening cycle as the bank saw it prudent to guide that the current level of interest rates if maintained for long would ensure a timely return of inflation to the 2% target.

The dollar strengthened to 1.2411 against Pound Sterling, gaining from 1.2489.

Against the Japanese currency, the dollar is down slightly at 147.43 yen, and against the Aussie, it weakened to 0.6440.

The dollar is firm against Swiss franc, fetching CHF 0.8956 a unit, while trading weak against the loonie at C$1.3512.