Dollar hits 4-month high ahead of retail sales data

The US dollar rose on Friday, to stretch its rally for the third straight day, jumping to a 4-month peak, on strong demand, which comes ahead of the reasele of key inflation data in the US, chief among those is the retail sales for January.

The dollar index rose 0.1% to highest since Oct. 10 at 99.16 points, after opening at 99.12, and hitting a day low of 99.05 points.

The greenback gained 0.1% on yesterday, to post its second straight daily gain, after upbeat inflation data released yesterday for January.

As for this week, the US dollar index gained 0.5% so far, to head for the second straight weekly gain.

These weekly gains are due to increased demand for the US currency after the release of successive strong data that raised confidence in the US economic growth path in the first quarter of 2020.

Additionally, the dollar drew support from the Federal Reserve Chairman Jerome Powell semi-annual testimony before the US Congress.

Fed Chair Jerome Powell stated before the House Financial Services Committee on Tuesday that the US economy is doing well, ruling out any reasons that could hinder the growth rate, and added that the current interest rates are appropriate to support economic growth.

Powell said before the Senate Banking Committee on Wednesday, that there is no reason that should stop growth as the unemployment is low, wages are high, and new jobs are added.

Investors are anticipating the release of the key US data for January, with the retail sales for January, which provides insight on more than 70% of the overall GDP in the US.

At 13:30 GMT, the retail sales reading will be released, with forecasts to rise by 0.3% in January unchanged from December, and the core reading is expected to rise by 0.3% vs. 0.7%.

At 14:15 GMT, the monthly industrial production reading is expected to shrink by -0.2% in January vs. -0.3% in December, and the capacity utilization rate to contract to 76.9% vs. 77.0%.

At 15:00 GMT, the preliminary UoM consumer sentiment reading for February is expected to reach 99.5 points vs. 99.8 in January.