Dollar firms after hot retail sales, yen languishes; China data awaited
Market focus was also on the Chinese yuan, with a slew of top-tier economic data due out of China later in the Asian morning expected to show the world's second-largest economy slowed in the first quarter.
In the U.S., retail sales rose 0.7% last month, compared with the 0.3% rise that economists polled by Reuters had forecast. Data for February was also revised higher to show sales rebounding 0.9%, which was the largest gain in just over a year, instead of the previously reported 0.6%.
The latest data has raised more questions about when the Federal Reserve could begin cutting interest rates, following robust employment gains in March and a pick-up in consumer inflation.
Markets are now pricing in a 41% chance of the Fed cutting rates in July, compared with around 50% before the data, according to CME FedWatch tool. The likelihood of the first cut coming in September has bumped up to nearly 46%.
«I just see no chance of a July hike, assuming we're all looking at the same data,» said Matt Simpson, senior market analyst at City Index.
«Add into the mix of safe-haven flows from Middle East headlines and the apparent reduction of Fed cut bets, the U.S. dollar was again the strongest FX major on Monday.»
The U.S. dollar index touched 106.27, the highest since Nov. 2, after the data. It last hovered around 106.23.
The Japanese yen languished under the dollar's continued strength and large interest rate differential between the two countries, breaching 154 to hit a fresh 34-year low against the dollar on Monday.
