U.S. Dollar Gains Strength Amid Positive Retail Sales and Anticipated Interest Rate Adjustments

The U.S. dollar saw an increase against major currencies following unexpectedly strong retail sales data. Anticipation of interest rate changes by the Federal Reserve has also influenced the currency's performance. Markets expect a rate cut, boosting the dollar as a safe haven, despite mixed performance against other currencies.

The U.S. dollar experienced an uplift against major currencies on Tuesday, buoyed by retail sales data that exceeded expectations, signaling underlying economic momentum. The Commerce Department revealed that U.S. retail sales climbed by 0.7% in November, driven by an increase in motor vehicle and online purchases.

Market participants are preparing for a potential 25-basis-point interest rate cut from the Federal Reserve at the conclusion of its two-day policy meeting. The CME's FedWatch tool indicates a nearly 97% probability of such a cut. The dollar remained stable against the Swiss franc but saw mixed movements against other currencies.

Global market strategist Marvin Loh remarked on the challenge of opposing the dollar's upward trend, citing U.S. economic resilience and its role as a safe haven amid global uncertainties. Meanwhile, the pound and yen gained strength against the dollar, while European currencies like the euro and others showed varied results.

(With inputs from agencies.)