Dollar Falls after U.S. Retail Sales in July Stagnate

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Dollar Falls after U.S. Retail Sales in July StagnateThe dollar plunged against most peers after U.S. retail sales in July stagnated due to anemic wage growth, indicating that the economic recovery still remains weak. At the same time, the yen fell on speculation the major global central banks won’t hike interest rates any time soon, lowering demand for safer assets.

The dollar fell 0.1 percent to trade at $1.3379 per euro after earlier surging 0.2 percent. The yen fell 0.2 percent to steady at 102.42 per dollar. The Japan’s currency also slid 0.2 percent to 137.03 per euro. The pound retreated 0.7 percent to $1.6692.

“The number was weaker than expected,” Sireen Harajli, a New York-based strategist at Mizuho Bank Ltd., told Bloomberg News. “This data doesn’t paint a picture of robust consumer spending at this point, so this why we’re seeing this kind of reaction in the market.”

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U.S. retail purchases remained steady in July, having increased 0.2 percent the previous month, reported the Commerce Department on Wednesday. Excluding cars, the sales increased 0.1 percent in July from a month earlier, against expectations of a 0.4 percent advance in a Wall Street Journal’s survey of economists.

Meanwhile, the Australian dollar gained after the country’s consumer confidence rose, while Chinese retail sales grew. The Aussie rose 0.4 percent to U.S. 93.06 cents after the consumer sentiment index, which is jointly compiled by the Melbourne Institute and Westpac Banking Corp, advanced 3.8 percent to 98.5, the strongest level since April. A reading below 100 means that pessimists exceed optimists. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com