Dollar Rises Despite Weaker Industrial Production

On Tuesday, the greenback moved higher against rival currencies despite the increase in the probability of the Federal Reserve being paused for a longer time due to weak U.S. industrial production data.

The U.S. dollar index, which measures the greenback against a basket of six major currencies was higher by 0.12 percent at 96.67.

The industrial production, which measures factories’ output, however, dropped 0.2% last month, contradicting economist’s expectations of a rise of 0.2 percent.

An economic research consultancy stated in a note, "the data have been volatile in recent months, led by swings in autos, but the net result has been weakening; manufacturing is especially export-oriented.”

GBP/USD dropped 0.32 percent to 1.3049 as the decision on Brexit remained uncertain even if Labour leader Jeremy Corbyn was firm on denying a report that Brexit discussions with Prime Minister Theresa May’s government were delayed.

EUR/USD fell to $1.1286 by 0.19 percent as better-than-expected euro zone economic sentiment data was placed out of line by news of European Central Bank members being unsure over whether the trading bloc will gain momentum and experience an economic recovery in the latter part of the year.

USD/CAD also fell to C$1.3357 by 0.04 percent as oil prices inched back from session lows in support of the loonie.

However, the loonie is expected to experience rough roads as the Bank of Canada is anticipated to cut rates. The first quarter "was very weak," said the chief economist at Gluskin Sheff in Toronto.

USD/JPY was down by 0.04 percent to 111.99 yen, but managed a comeback and touched 112.16 yen, the pair’s highest value since December of last year.

Last month, Japan’s exports maintained low levels for four straight months due to weak global demands. Exports to the United States increased by 4.4 percent, generating a surplus of almost 684 billion yen, according to the Bureau of Finance in Tokyo, while the slump in sales to China contributed a 2.4 percent drop in Japan’s total exports.


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