The U.S. Dollar rose against a basket of major currencies on Friday, underpinned by solid U.S. economic data including a notable jump in inflation expectations. This helped bolster expectations that the U.S. Federal Reserve will raise interest rates at next week’s monetary policy meeting.

June U.S. Dollar Index futures settled at 89.797, up 0.116 or +0.13%.

 

 

Economic News

U.S. industrial Production surged in February, boosted by strong increases in output at factories and mines. Capacity Utilization came in at 78.1%, above the 77.7% estimate and 77.4% previous reading.

Preliminary University of Michigan Consumer Sentiment rose to 102.0, up from 99.7. The forecast called for a reading of 99.2. Preliminary University of Inflation Expectations jumped to 2.9%, up from 2.7%.

The JOLTS Job Openings survey also rose to 6.31 Million, up from 5.81M. Economists had forecast a reading of 5.91M.

Geopolitical News

Early in the session, investors responded to two developments. Firstly, according to the Washington Post, U.S. President Trump had decided to replace his national security adviser, H.R. McMaster.

At the same time, the New York Times reported U.S. Special Counsel Robert Mueller had issued a subpoena for documents related to Trump’s businesses, including some concerning Russia.

U.S. Treasury Markets

U.S. Treasury yields rose on Friday, with 2-year Treasury Notes reaching a nine-year high ahead of the U.S. Federal Reserve meeting on March 21. The Fed is widely expected to raise its benchmark interest rate at this meeting.

Long-term debt rates, however, remained lower for the week following softer inflation data earlier in the week and turmoil in Washington.

U.S. Equity Indexes

The major U.S. equity indexes finished higher on Friday, but this was not enough to turn the indexes positive for the week. Despite reports of solid capacity utilization, stronger than expected industrial production and extremely optimistic consumer sentiment, prices were pressured by fears of a possible trade war and White House turmoil.

In the cash market, the benchmark S&P 500 Index finished at 2752.01, up 4.68 or +0.17%. The blue chip Dow Jones Industrial Average settled at 24946.51, up 72.85 or +0.29% and the tech-based NASDAQ Composite Index ended the session at 7489.42, up 7.68 or +0.10%.

A 6.8 percent drop in shares of Boeing weighed on the Dow and S&P 500 Index. The NASDAQ Composite was pressured by a 1.4 percent decline in Google-parent Alphabet and a 0.7 percent fall in Amazon shares.

This article was originally posted on FX Empire