Dollar edges higher; consolidating after volatile period

investing.com:

Investing.com — The U.S. dollar edged higher in early European trade Thursday, holding its ground after a rebound from sharp losses earlier in the week as traders digested recent economic data and the potential impact on thinking at the Federal Reserve.

At 03:30 ET (08:30 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, rose 0.1% to 104.350.

The index suffered from volatile trading this week, gaining 0.3% on Wednesday following a 1.5% plunge the previous day.

The dollar drew support from better-than-expected retail sales numbers on Wednesday, after plunging as data showed cooling U.S. consumer prices raised doubts over whether the Federal Reserve would increase interest rates further in this particular cycle.

Also helping the U.S. currency was the news that the U.S. Senate passed a stopgap spending bill and sent it to President Joe Biden to sign into law before a weekend deadline.

“The release of US October retail sales failed to kindle this week's dollar bear trend and the Senate's support for a stopgap funding bill has removed the risk of a dollar bearish government shutdown at midnight on Friday,” said analysts at ING, in a note.

There is more data to digest Thursday, in the form of weekly jobless claims, industrial and manufacturing production for October, and the Philadelphia Fed manufacturing index for November, as well as a series of Fed speakers.

In Europe, EUR/USD edged lower to 1.0844, but remains near to its highest level since August seen earlier in the week.

There are several central bankers, including ECB President Christine Lagarde, set to speak at various events Thursday, and traders will be looking for further clues of their thinking regarding interest rates.

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