Retail sales increased 1.1% last month, beating economist estimates of a gain of 0.8%. The March increase was the largest since September 2012 and February’s total sales were revised higher to 0.7% from 0.3%.
The dollar rose to ¥101.82 from ¥101.69 late Friday. The ICE dollar index , rose to 79.741 from 79.492 late Friday.The Australian dollar rose to 94.15 U.S. cents from 93.95 U.S. cents.
“The overall tone of this report was unambiguously constructive, underscoring that U.S. consumers are back in the game after the weather-induced slump in spending in earlier months.Strong economic data lend support to the Fed’s current removal of its monthly bond purchases, which are on track to finish by year end, and could even prompt a faster removal. That in turn leads to speculation about when the Fed could hike rates, which would boost the dollar.
The euro fell to $1.3818 from $1.3886 late Friday. European Central Bank officials over the weekend discussed further monetary easing, the latest sign they could be willing to take unconventional steps to fight low inflation. ECB President Mario Draghi said on Saturday a further euro strength would prompt further monetary easing to fight the low level of inflation.
Draghi has in recent weeks noted that the strong euro is weighing on consumer prices in the euro zone, making clear that the ECB is concerned the appreciating currency could hamper the region’s recovery. Further monetary easing would ease demand for the euro and push the exchange rate lower.The comments from Draghi came after he said at the April news conference that the Governing Council has discussed launching unconventional easing measures, including quantitative easing, and that such tools would fall within the central bank’s mandate. That view was echoed by ECB executive board member Benoît Coeuré on Sunday, who said the ECB may consider targeted asset purchases to hold-down long-term interest rates.
Traders also focused on the ongoing crisis between Ukraine and Russia. Pro-Russian militants in eastern Ukraine ignored a deadline issued by Ukraine to disarm, prompting the government to mobilize the military as it struggled to prevent a replay of Russia’s takeover of Crimea. The dollar rose 0.5% to 35.94 Russian rubles on Monday.
The British pound was little changed at $1.6736. The WSJ Dollar Index , another gauge of dollar strength, rose to 72.84 from 72.69 late Friday.