India Morning Call - Global Markets

FOREIGN EXCHANGE

NEW YORK - The dollar rose broadly on Tuesday after unexpectedly strong U.S. retail sales, excluding automobiles, in April supported views that the Federal Reserve would probably not cut interest rates again next month.

Retail sales excluding the hard-pressed auto sector increased 0.5 percent, more than double the increase that economists had forecast, and followed a 0.4 percent pickup in March, suggesting that the U.S. consumer remained resilient despite the housing market rout.

The reading bolstered the dollar as consumer spending accounts for about two-thirds of the U.S. economy.

The euro dropped to a session low of $1.5431 <EUR=>. In late trading it was down 0.4 percent at $1.5479. The New York Board of Trade's dollar index, which tracks the dollar's performance against a basket of currencies, rose 0.4 percent to 73.246 .DXY.

The dollar jumped to a session high of 104.92 yen <JPY=>. It was last trading at 104.77 yen, up 1 percent on the day and shrugging off mixed U.S. shares.

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TREASURIES

NEW YORK - U.S. Treasury debt prices fell to session lows on Tuesday after several Federal Reserve officials voiced concerns about the dangers of inflation.