US Dollar Gains on Strong Retail Sales Data

The US Dollar remained stable near a two-week high against major currencies, bolstered by strong economic data that alleviated recession fears. Retail sales surged by 1% in July, far exceeding expectations of 0.3%, while initial jobless claims fell to 227,000, supporting a positive economic outlook. Despite this, traders are adjusting their expectations regarding the Federal Reserve's interest rate cuts, with the likelihood of a significant 50 basis-point reduction in September decreasing to around 25%. The Australian Dollar also showed strength due to positive employment data, with fresh payrolls exceeding estimates, prompting speculation of potential tightening by the Reserve Bank of Australia. Overall, market sentiment remains optimistic as investors react to the latest economic indicators, reflected in rising S&P 500 futures and robust Treasury yields. As a result, the dollar index was little changed at approximately 102.92 after a notable increase the previous day.