Dollar Holds Weak Amid Debt Concerns, European Stocks Extend Gains

Stronger-than-expected consumer prices on Wednesday failed to support the dollar, pushing it even lower on Thursday despite markets increasing their expectations on the number of rate hikes delivered by the Fed. Investors seem to be cautious as they worry that the US national debt could surge significantly on the face of massive tax cuts and the government’s two-year spending plan approved last week. Worse-than-expected US retail sales also dampened sentiment on consumption. Dollar/yen was last trading at 106.46, near today’s fresh 15-month low of 106.16 (-0.50%), while the dollar index stood weak at 88.72 (-0.44%). Euro/dollar managed to gain ground, rising slowly to a two-week high of 1.2509 (+0.26%), although political news out of Germany signaled yesterday that the relationship between Merkel’s Conservatives and their likely coalition partners, the SPD, might not be as harmonious as in the past. Uncertainties around the upcoming Italian elections were also weighing on the pair. Pound/dollar was getting love as well, crawling up to a 1 ½-week peak of 1.4076 (+0.46%). Dollar/loonie was flat at 1.2484.

Source:: Dollar Holds Weak Amid Debt Concerns, European Stocks Extend Gains

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