The U.S. dollar sank to a one-month low versus major peers on Friday as traders lowered Federal Reserve rate hike expectations amid signs the central bank might slow or even pause its tightening cycle in the second half of the year. The risk-sensitive Australian dollar rallied 0.51% to $0.7136, while the New Zealand dollar jumped 0.49% to $0.6510. It reached a nearly two-decade peak above 105 mid-month, but retreated amid signs that Fed tightening may already be slowing economic growth.
USD/CAD faces downward pressure on risk-on global sentiment.
The Canadian dollar strengthened against its U.S. counterpart on Thursday as a jump in oil prices and improvement in risk appetite offset domestic data showing that retail sales growth stalled in March. The loonie was up 0.3% at 1.2775 to the greenback, or 78.28 U.S. cents, moving toward the stronger end of its range over the last week or so, which has been between 1.2762 and 1.2895. "Higher oil prices are helping lift the loonie today," said Erik Nelson, a currency strategist at Wells Fargo in New York.
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Dollar Tree says customers are responding well to its increased price point to $1.25. Dollar General said Q1 sales grew despite inflation headwinds.
The British pound continues to see a lot of resistance near the 1.26 level, as we have given back early gains on Thursday.
The Euro has rallied a bit during the trading session on Thursday but continues to see a lot of resistance at the 50 Day EMA.
The Australian dollar has struggled a bit over the last couple of days, as we continue to see the sellers jump into this market.
* Canadian dollar weakens 0.1% against the greenback * Canadian retail sales were unchanged in March * Price of U.S. oil rises 0.8% * Canadian bond yields ease across steeper curve TORONTO, May 26 (Reuters) - The Canadian dollar edged lower against its U.S. counterpart on Thursday as a move higher in oil prices was offset by domestic data showing that retail sales growth stalled in March, but the currency stuck to its recent sideways trading pattern. Canadian retail sales were unchanged in March from February, missing estimates for a 1.4% advance, as lower sales at motor vehicle and parts dealers offset gains in all other subsectors, data from Statistics Canada showed. U.S. crude prices were up 0.8% at $111.18 a barrel, while world stock markets broadly stabilized and bond yields eased as no hawkish surprises from the latest U.S. Federal Reserve minutes helped soothe immediate worries over the impact of rate hikes on economic growth.
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Dollar Tree Inc. shares jumped 13% in premarket trades Thursday after the retailer said its first-quarter profit rose to $536.4 million, or $2.37 a share, from $374.5 million, or $1.60 a share in the year-ago quarter. Sales rose 6.5% to $6.9 billion from $6.48 billion in the year-ago quarter. Wall Street analysts expected Dollar Tree to earn $2 a share on revenue of $6.76 billion, according to FactSet data. "During the quarter, the Dollar Tree team successfully completed its conversion to the $1
Top U.S. dollar store chains on Thursday raised their sales expectations for the year as bargain-hunting Americans increasingly shop at discounters with inflation at a four-decade high, sending shares of the retailers at least 15% higher. Shares of Dollar Tree Inc and Dollar General Corp rebounded from a slide last week that wiped off nearly a fifth of their value after huge profit declines at industry bellwethers Walmart Inc and Target Corp.
By Geoffrey Smith
The U.S. dollar edged lower on Thursday as markets considered whether the Federal Reserve might slow or even pause its tightening cycle in the second half of the year, which would weaken the allure of the safehaven currency. The currency began to weaken after minutes from the Fed's May meeting, released Wednesday, showed that most participants judged that 50 basis-point hikes would likely be appropriate at the June and July policy meetings to combat inflation that they agreed had become a key threat to the economy's performance. "That's prompting a little bit of a rally here for risky assets, which is really nice for the risk trade, which in essence, is bad for the dollar," he said.
The U.S. dollar edged higher in early European trade Thursday, but remained near a one-month low amid concerns aggressive tightening by the Federal Reserve may already be slowing economic growth. The minutes from the early May Fed meeting, released Wednesday, indicated that the central bank policymakers will be sticking to a plan to raise rates by a half-percentage point at its next two meetings starting next month, largely as expected. The scaling back of Fed tightening bets has followed slowing economic growth, with new home sales falling almost 17% last month and retailers reporting disappointing results as consumers scale back discretionary spending as the prices of essentials like food and petrol soar.
By Gina Lee
USD/CAD rises amid more aggressive Fed rate hikes.
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"The bulk of the Canadian dollar rally has come from the equity market reaction post-FOMC minutes," said Erik Bregar, director, FX & precious metals risk management at Silver Gold Bull. Wall Street rose after the Fed minutes showed policymakers were unanimous in their sentiment that the U.S. economy was very strong as they grappled with how to rein in inflation without triggering a recession. "As soon we see some dovish tilt out of the Fed we could see (interest) rates fall and stocks rally," Bregar added.
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