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The dollar index pulled back on Friday morning in Asia following a sharp spike to 3 and half week high in the previous session. Gains in the global reserve currency came on the back of firm US data which supported the Federal Reserve's (Fed) stance to hold rates unchanged. US retail sales rose 0.6% on month in June, well above the 0.1% forecast, rebounding from May's sharp 0.9% drop. Core retail sales, which exclude autos and gas, also climbed 0.5%, up from 0.2% previously. Initial jobless claims fell to 221,000 last week, below the expected 235,000, signaling ongoing tightness in the labor market. Meanwhile, the Philadelphia Fed manufacturing index surprised to the upside, surging to 15.9 in July from -4.0 in June, far exceeding market expectations of -1. Meanwhile, on Thursday, San Francisco Fed President Mary Daly called two rate cuts this year a reasonable outlook, while warning against waiting too long. Fed Governor Christopher Waller also said the Fed should cut interest rates 25 basis points at the July meeting. However, FOMC Governor Adriana Kugler noted that it is appropriate to keep the policy rate of interest steady 'for some time,' given low unemployment and building price pressure from tariffs. The dollar index that measures the greenback against a basket of currencies is quoting at 98.24, down 0.22% on the day but is all set for a third straight weekly gain. The University of Michigan Consumer Sentiment, Building Permits, and Housing Starts are due later in the day.

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