2023.04.1421:03:00UTC+00Dollar Rebounds Against Major Counterparts On Rate Hike Bets

The U.S. dollar firmed against most of its major counterparts on Friday, rebounding from recent losses amid bets the Federal Reserve will continue to hike interest rates.

Federal Reserve Governor Christopher Waller said recent data indicate inflation remains high and the central bank's job is not done.

"Financial conditions have not significantly tightened, the labor market continues to be strong and quite tight, and inflation is far above target, so monetary policy needs to be tightened further," Waller added.

CME Group's Fedwatch tool indicates the Fed will raise the federal fund rate by 25 basis points in May, with rate cuts seen in the back half of the year to boost consumer spending and growth.

Traders also digested the latest batch of economic data. A report from the Commerce Department showed retail sales in the U.S. slumped by 1% in March after dipping by a revised 0.2% in February. Economists had expected retail sales to decline by 0.4%.

A report from the University of Michigan showed one-year inflation expectations jumped to 4.6% in April from 3.6% in March. At the same time, five-year inflation expectations held at 2.9% for fifth straight month and have stayed within the narrow 2.9 to 3.1% range for 20 of the last 21 months.

A separate report from the Federal Reserve showed U.S. industrial production increased by more than expected in March, although the increase was largely due to a spike in utilities output.

The dollar index, which climbed to 101.75 about an hour past noon, is at 101.57, up 0.55% from the previous close.

Against the Euro, the dollar has strengthened to 1.0997 from 1.1047.

The dollar is firm at 1.2416 against Pound Sterling, gaining from 1.2524. Against the Japanese currency, the dollar firmed to 133.76 yen from 132.57.

Against the Aussie, the dollar is trading at 0.6710, and against Swiss franc, it is trading at CHF 0.8940. The dollar is trading at 1.3358 against the loonie, up from 1.3341.