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Dollar Losing Ground After Flood Of Economic Reports

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The dollar is down against all of its major rivals Friday afternoon. Investors were confronted with a large number of U.S. economic reports this morning, the bulk of which proved disappointing. The flat inflation data and the unexpected drop in retail sales dampened expectations for a faster rate hike by the Federal Reserve.

A report released by the Commerce Department on Friday showed U.S. retail sales unexpectedly decreased for the second consecutive month in June. The Commerce Department said retail sales fell by 0.2 percent in June after edging down by a revised 0.1 percent in May.

The continued drop in sales surprised economists, who had expected sales to inch up by 0.1 percent compared to the 0.3 percent decrease originally reported for the previous month.

Consumer prices in the U.S. came in unchanged in the month of June, according to a report released by the Labor Department on Friday. The Labor Department said its consumer price index was flat in June after edging down by 0.1 percent in May. Economists had expected consumer prices to inch up by 0.1 percent.

Industrial production in the U.S. increased by slightly more than anticipated in the month of June, the Federal Reserve revealed in a report on Friday. The Fed said industrial production climbed by 0.4 percent in June after inching up by a revised 0.1 percent in May.

Economists had expected production to rise by 0.3 percent compared to the unchanged reading originally reported for the previous month.

With consumer expectations taking a hit, the University of Michigan released a report on Friday showing a notable deterioration in U.S. consumer sentiment in the month of July. The preliminary report said the consumer sentiment index dropped to 93.1 in July from the final June reading of 95.1. Economists had expected the index to edge down to 95.0.

While the Commerce Department released a report on Friday showing a rebound in U.S. business inventories in the month of May, the report also showed a drop in business sales. The report said business inventories rose by 0.3 percent in May after falling by 0.2 percent in April. The increase in inventories matched economist estimates.

The dollar has fallen to around $1.1465 against the Euro Friday afternoon, from an early high of $1.1391.

The Eurozone trade surplus increased in May as growth in exports outpaced the rise in imports, data from Eurostat showed Friday. The trade surplus increased to a seasonally adjusted EUR 19.7 billion in May from EUR 18.6 billion in April. Exports grew 2.1 percent from April and imports by 1.6 percent.

The buck has dropped to a 10-month low of $1.3090 against the pound sterling Friday afternoon, from an early high of $1.2934.

The greenback slipped to over a 1-week low of Y112.251 against the Japanese Yen Friday, but has since rebounded to around Y112.560.

Japan's industrial production declined more than estimated in May, final data from the Ministry of Economy, Trade and Industry showed Friday. Industrial output fell 3.6 percent on a monthly basis instead of 3.3 percent decrease estimated previously. Year-on-year, production advanced 6.5 percent.

by RTT Staff Writer

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