Euro Rose, Ruble and US Dollar Index Fell: Waiting on the Rate Hike
US Dollar Index fell
The US Dollar Index measures the strength of the US dollar against a basket of major currencies. It saw a correction on December 11, 2015. The index fell by 0.31% to 97.63. The US Dollar Index fell despite the release of positive data in terms of inflation and retail sales. The coming week will be crucial for the US dollar. The Fed is scheduled to meet on December 16 to decide on whether or not the federal funds rate should be hiked.
Strong domestic data
The U.S. Census Bureau published the retail sales data for November on December 11, 2015. The retail sales rose by the most in four months. November saw a rise of 0.2%, while the core retail sales also saw a rise of 0.4%. The rise in the retail sales was mainly due to the fall in gasoline prices. This caused a rise in the disposable income in the economy. The day also saw the release of the PPI (Producers Price Index) by the Bureau of Labor Statistics. The PPI for November rose by 0.3%. This supports going ahead with the rate hike in the Fed’s meeting.
Impact on the market
The retail ETFs were negative on December 11, 2015, even after the release of strong retail sales data. The SPDR S&P Retail ETF (XRT) fell by 1.9%. The Market Vectors Retail ETF (RTH) also followed a similar trajectory. It fell by 1.5%.
The United Parcel Service (UPS) saw a substantial loss of 3.0% at the end of trade on December 11, 2015. FedEx (FDX) fell by 2.8%. Citigroup (C) was another major loser on December 11. It fell by 2.9% for the day.
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