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Dollar index turns lower after U.S. retail sales miss

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Investing.com -

Investing.com - The dollar turned broadly lower against a basket of major currencies on Wednesday, after official data showed that U.S. retail sales were flat in July, undermining optimism over the economic recovery.

The drop in the dollar came after the Commerce Department reported that U.S. retail sales were flat last month, disappointing expectations for a 0.2% increase.

Core retail sales, which exclude auto sales, rose just 0.1% in July, compared to expectations for a 0.4% gain.

EUR/USD was up 0.30% to 1.3408 after falling to session lows of 1.3342 earlier, near last Wednesday's nine-month lows of 1.3332.

The euro fell to session lows earlier after data showed that euro zone industrial output unexpectedly declined in June, adding to fears that the recovery in the region is faltering.

Investors were looking ahead to euro zone data on economic growth and inflation on Thursday, amid expectations for weak readings. Weak reports would add to pressure on the European Central Bank to implement fresh measures to bolster growth after it cut rates to record lows in June.

The dollar was flat against the yen, with USD/JPY at 102.24, off highs of 102.52.

The yen showed little reaction earlier Wednesday after official data showed that Japan's economy contracted by an annualized 6.8% in the second quarter, as a result of a sales tax increase which came into effect on April 1. Economists had forecast a contraction of 7.1%.

GBP/USD was down 0.42% to 1.6728, after falling as low as 1.6700 earlier.

Sterling remained under pressure after the Bank of England cut its wage growth forecast and said the rate of wage growth would be critical in determining the future timing of rate hikes.

Earlier Wednesday, the latest U.K. jobs report showed that average earnings in the U.K. contracted 0.2% in the three months to June. It was the first decline since 2009.

The weak wage growth data offset a decline in the unemployment rate to 6.4% and a drop in the number of people claiming jobless benefits.

The dollar fell to session lows against the Swiss franc, with USD/CHF down 0.34% to 0.9044.

The Australian and New Zealand dollars gained ground, with AUD/USD advancing 0.51% to 0.9314 and NZD/USD jumping 0.84% to 0.8472. Meanwhile, USD/CAD dipped 0.05% to 1.0918.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, eased 0.16% to 81.42, off highs of 81.72.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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