Currencies
FONT-SIZE Plus   Neg
Share SHARE

Dollar Mixed After Drop In Retail Sales

Dollar Mixed After Drop In Retail Sales

The dollar is currently trading mixed against its major competitors Wednesday, following a larger than expected decline in retail sales. The U.S. currency is gaining ground against both the Japanese Yen and the pound sterling, but has weakened against the Euro.

Greek Finance Minister Giannis Stournaras and Labor Minister Giannis Vroutsis told the European Parliament's Economic Affairs and Employment Committees on Tuesday that it is up to the EU to come forward with the next aid tranche. There were many distortions in the Greek finance and labor markets that had to be tackled, but Greece has taken all the necessary measures, they noted.

Meanwhile, the Greek economy contracted at a faster pace in the third quarter, signaling a further deepening of the ongoing recession, as the downturn in economic activity intensified amid the unresolved debt crisis, preliminary data from the Hellenic Statistical Authority showed Friday.

Gross domestic product, on an unadjusted basis and at constant prices, fell 7.2 percent year-on-year in the third quarter, after falling 6.3 percent in the second quarter. The economy has contracted for the seventeenth consecutive quarter.

The dollar is extending yesterday's losses against the Euro on Wednesday, reaching a low of $1.2778, compared to Tuesday's high of $1.2685.

Eurozone industrial output dipped by a seasonally adjusted 2.5 percent in September from a month ago, Eurostat reported Wednesday. Economists had forecast a 2 percent fall after rising 0.9 percent in August.

On a yearly basis, overall production was down 2.3 percent in September, bigger than the 1.3 percent drop logged in August. The annual decline also exceeded a 2.2 percent drop forecast by economists.

France's EU harmonized inflation slowed from the previous month in October, and matched economists' expectations, data released by statistical office Insee showed Wednesday.

The harmonized index of consumer prices (HICP), measured under the EU methodology, increased 2.1 percent year-on-year in October, after growing 2.2 percent in September. The latest figure matched economists' expectations.

The Bank of England forecast for contraction by the British economy and sluggish growth in the near term has opened the door for more quantitative easing. On the inflation front, the central bank does not expect inflation to fall back until the second half of 2013.

In its quarterly Inflation Report published on Wednesday, the BoE trimmed its growth forecast but lifted its inflation outlook on the recent out turn of higher inflation and the spike in energy charges.

At the press conference, BoE Governor Mervyn King warned that the economy faces an "unappealing mix of a weak recovery and high inflation."

The buck has broken out of a 2-day trading range around the $1.5880 level against the pound sterling and reached over a 2-month high of $1.5838 on Wednesday.

The number of persons claiming jobless allowance in the UK increased unexpectedly in October, while the unemployment rate fell to its lowest level in more than a year in the three months through September, the latest figures from the Office for National Statistics showed Wednesday.

The claimant count rose by 10,100 from a month earlier to 1.58 million in October against economists' forecast for no-change. This is the strongest rise in the number of claims for job seekers' allowance since September 2011. The latest change followed a revised increase of 800 jobless claimants in the previous month.

The greenback has rebounded from yesterday's low of Y79.200 against the Yen on Wednesday and has set a 1-week high of Y80.297.

Retail sales in the U.S. fell by more than expected in the month of October, according to a report released by the Commerce Department on Wednesday, although the drop came on the heels of a bigger than previously estimated increase in sales in September.

The report said retail sales fell by 0.3 percent in October following an upwardly revised 1.3 percent increase in September. Economists had expected sales to edge down by 0.1 percent compared to the 1.1 percent growth originally reported for the previous month.

With prices for light motor trucks and passenger cars showing a notable decrease in the month of October, the Labor Department released a report on Wednesday showing an unexpected drop in U.S. producer prices for the month.

The Labor Department said its producer price index fell by 0.2 percent in October following a 1.1 percent jump in September. The drop came as a surprise to economists, who had expected producer prices to increase by 0.2 percent.

Business inventories in the U.S. rose by more than anticipated in the month of September, according to a report released by the Commerce Department on Wednesday, with the report also showing a notable increase by business sales.

The report said business inventories increased by 0.7 percent in September following an unrevised 0.6 percent increase in August. Economists had expected inventories to increase about 0.4 percent.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Market Analysis

comments powered by Disqus