The dollar index (DXY00) Tuesday rose by +0.08% on stronger-than-expected US retail sales and import price reports. The dollar also has support from the improved chances that Donald Trump will win the presidential election in November, as Trump’s tax-cut and trade policies are seen as inflationary and hawkish for Fed policy. The dollar fell back from its best levels after the July NAHB housing market index unexpectedly fell to a 7-month low and after Fed Governor Kugler said it would be appropriate for the Fed to lower borrowing costs "later this year" if inflation continues to moderate.
US June retail sales were unchanged m/m, stronger than expectations of a -0.3% m/m decline. Also, June retail sales ex-autos rose +0.4% m/m, stronger than expectations of +0.1% m/m.
