IForex Daily : April 14, 2014

 | Apr 14, 2015 02:44AM ET

The dollar climbed against most currencies on Monday on renewed optimism among investors that the Federal Reserve would stay on track to raise interest rates this year. A surprise decision by Singapore's central bank not to ease policy gave a boost to emerging currencies in the region and urged investors to some profit-taking on their U.S. dollar positions. In contrast, China's central bank continued to ease its policy by dropping short-term interest rates lower for the fifth time since the Lunar New Year in February. Japan's Nikkei swings around 19,900, managing recently to break just above the 20,000 level. On Wall Street, investors remain worried that a strong dollar would constrain earnings at multinational corporations causing all the main indices to end Monday in negative territory. Eyes are also on U.S. retail sales data due later Tuesday for evidence that spending is picking up after a sluggish start of the year.

EUR/USD

The dollar's sharp recovery on Monday pushed the euro to 12 year lows as markets remain optimistic that the Federal Reserve will stay on track to raise interest rates this year. The renewed dollar strength was also helped by earnings season, as many U.S. corporations convert their overseas revenues into dollars, driving up the demand for the U.S currency. Despite the recent pause in the dollar's ascent due to recent disappointing U.S. economic data, growth in other major economies also seems to be slowing down. The dollar maintained its strength before a report on Tuesday forecast to show U.S. retail sales increased by the most in a year, supporting the case for the Federal Reserve to raise interest rates in 2015.