Dollar Gains for Fourth Day as U.S. Data Boost Economic Outlookby
Producer prices, manufacturing spur 2016 rate-increase odds
Fed publishes minutes of January FOMC meeting Wednesday
The dollar climbed for a fourth day against the euro as U.S. data bolstered the nation’s economic outlook, adding to the case that the Federal Reserve will raise interest rates this year.
The greenback extended its longest streak of gains since the first week of 2016 after reports showed U.S. wholesale prices unexpectedly increased in January, while manufacturing output rose by the most since July. Minutes of the Fed’s last policy meeting will be released Wednesday.
"The dollar’s getting a little bit of a bounce here as a result of the higher-than-expected producer price index," said Omer Esiner, chief market analyst at currency brokerage Commonwealth Foreign Exchange Inc. in Washington. The data are "a sign of economic resilience in the U.S., which obviously bodes well for the dollar."
The U.S. currency has rallied during the past two years as investors bet the Fed would tighten monetary policy as the economy improved, in contrast with other central banks that were carrying out unprecedented stimulus. Those gains have stalled in 2016 amid concern that the world’s biggest economy won’t escape slowdowns from China to Canada and Brazil.
The dollar rose 0.2 percent to $1.1121 per euro as of 9:39 a.m. in New York. It was 0.2 percent higher at 114.27 yen. The Bloomberg Dollar Spot Index, which tracks the currency against 10 major peers, was little changed at 1,227.91.
The probability of a Fed increase this year has stayed low after liftoff in December. The chances the Federal Open Market Committee will raise borrowing costs this year rose to 42 percent from 34 percent Tuesday.