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Dollar Giving Back Early Gains As Data Drought Persists

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The dollar is paring its early gains against its major rivals Tuesday afternoon. The reversal has left the buck clinging to modest gains against the Euro and the British pound, but down against the Japanese Yen.

The lack of U.S. economic data has kept some investors on the sidelines. Traders are looking forward to the release of productivity and costs Wednesday morning, as well as wholesale trade data. Weekly jobless claims and producer prices will follow on Thursday, while the consumer price index is slated for Friday.

The dollar climbed to a 1-week high of $1.1713 against the Euro Tuesday, but has since pulled back to around $1.1760.

German exports declined the most in nearly two years in June and imports logged the biggest contraction since 2009, lifting the trade surplus to a higher level.

Exports fell unexpectedly by 2.8 percent in June from May, when they climbed 1.5 percent, data from Destatis showed Tuesday. This was the biggest fall since August 2015, when shipments slid 5.4 percent.

At the same time, imports decreased 4.5 percent, in contrast to May's 1.3 percent increase.

Imports fell for the first time in four months, logging the sharpest contraction since January 2009. Both exports and imports were expected to gain 0.2 percent each in June.

As a result, the trade surplus increased to a seasonally adjusted EUR 21.2 billion from EUR 20.3 billion in May.

The French trade deficit widened in June, data from the customs office showed Tuesday. The trade shortfall increased to EUR 4.66 billion from EUR 4.43 billion in May. The deficit was forecast to widen to EUR 5.05 billion.

France's current account deficit increased in June from a month earlier, data from the Bank of France showed Tuesday. The current account deficit rose to EUR 2.1 billion in June from EUR 1.9 billion in May.

The buck rose to a 2-week high of $1.2949 against the pound sterling Tuesday, but has since eased back to around $1.2985.

Like-for-like sales in the United Kingdom were up 0.9 percent on year in July, the British Retail Consortium said on Tuesday, in line with expectations and slowing from 1.2 percent in June. Overall retail sales in the UK were up 1.4 percent on year.

The greenback hit a high of Y110.827 against the Japanese Yen Tuesday, but has since retreated to around Y110.350.

Japan had a current account surplus of 934.6 billion yen in June, the Ministry of Finance said on Tuesday. That beat forecasts for a surplus of 860.5 billion yen following the 1,653.9 billion yen surplus in May.

Overall bank lending in Japan was up 3.3 percent on year, the Bank of Japan said on Tuesday, coming in at 516.253 trillion yen. That was in line with expectations and unchanged from the June reading.

A measure of peoples' assessment of the Japanese economy decreased unexpectedly in July, survey figures from the Cabinet Office showed Tuesday. The current index of Economy Watchers' survey dropped to 49.7 in July from 50.0 in June, which was the highest score since December 2015.

by RTT Staff Writer

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