WASHINGTON (dpa-AFX) - An escalation in geopolitical tensions in the Middle
East coupled with hawkish commentaries from Fed officials supported the Dollar
during the week spanning April 15 to 19. The Dollar gained against the pound,
but the Australian Dollar as well as the Japanese yen slipped against the euro.
The multi-currency Dollar Index also increased during the week.

The Dollar Index or DXY, which measures the dollar's strength against a basket
of 6 currencies gained 0.10 percent during the week ended April 19.

A more-than-expected reading on retail sales in the U.S. released at the onset
of the new week compounded the anxiety triggered by the hotter-than-expected
inflation data released in the previous week and the geopolitical flare-up over
the weekend. Data released by the U.S. Census Bureau on Monday showed Retail
sales in the U.S. rising 0.7 percent month-over-month in March versus an
upwardly revised 0.9 percent gain in February and surpassing market forecasts of
0.3 percent.

The Fed Chair Jerome Powell in his speech on Tuesday hinted that the Fed was in
no hurry to cut rates as restrictive monetary policy needed time to work. The
Fed Chair's concerns about a lack of expected progress in inflation goals came
amidst sticky inflation readings, resilient job market updates and buoyancy in
retail sales rebound and helped lift the Dollar Index to the week's high of
106.52.

Though the index cooled to 105.74 by Thursday, escalating geopolitical tensions
boosted safe-haven demand for the dollar, lifting it to a high of 106.35 on
Friday. The Index eventually closed at 106.12 versus 106.01 a week earlier.
Better-than-expected GDP readings from China however limited the Dollar's gains.

The U.S. Dollar slipped against the euro during the week ended April 19 amidst
growing hints that the European Central Bank was gearing for a rate cut in June.
The EUR/USD pair rose to 1.0654 on April 19 from 1.0642 a week earlier,
recording an increase of 0.11 percent. During the week, the pair touched a low
of 1.0601 on Tuesday and a high of 1.0690 on Thursday. Data released on Tuesday
had showed the ZEW Indicator of Economic Sentiment for Germany rising to 42.9 in
April from 31.7 in March, beating forecasts of 35.9.

The U.S. Dollar surged against the British pound during the week ended April 19,
even as markets expected the Bank of England to start cutting rates ahead of a
Fed rate cut. Data released during the week showed a more-than-expected reading
of unemployment rate, a less-than-expected decline in inflation, and an
unexpected dip in retail sales. The GBP/USD pair which had closed at 1.2450 on
April 12, dropped to 1.2371 by April 19. The pair touched a high of 1.2500 on
Monday but dropped to 1.2365 on Friday.

The Australian Dollar too slipped 0.71 percent against the U.S. Dollar during
the week ended April 19. The AUD/USD pair which had closed at 0.6463 on April 12
jumped to 0.6495 on Monday before dropping to 0.6362 on Friday. The pair
recovered and finally closed at 0.6417 on Friday.

The week also saw the Japanese yen plunge against the U.S. Dollar. The USD/JPY
pair which was at 153.28 on April 12 jumped to 154.63 in a week's time. The pair
had touched a low of 152.99 on Monday and a high of 154.80 on Tuesday amidst
lingering fears of a regulatory intervention to slow the yen's depreciation.
According to the data released on Thursday, inflation in Japan eased along
expected lines, but remained well above Bank of Japan's target of 2 percent.

On the horizon are key economic data releases ranging from Australia's inflation
update on Tuesday, GDP update from the U.S. on Thursday, as well as the
PCE-based inflation readings from the U.S. on Friday. Bank of Japan's interest
rate decision is also due on Thursday.

Amidst the anxiety about a potential postponement of rate cuts by the Fed, the
Dollar index has increased to 106.26. The EUR/USD pair has decreased to 1.0640.
The GBP/USD pair has also fallen to 1.2311. The AUD/USD pair increased to
0.6437. The USD/JPY pair is meanwhile hovering near 154.70.



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