Dollar mixed af­ter dis­ap­point­ing US re­tail sales re­port

The China Post - - BUSINESS INDEX & -

The dollar was mixed Wed­nes­day af­ter a dis­ap­point­ing U.S. re­tail sales re­port ag­gra­vated con­cerns about the health of the world’s top econ­omy, while up­beat fac­tory out­put data sup­ported the em­bat­tled euro.

In Tokyo, the dollar was slightly higher at 119.67 yen against 119.44 yen in New York, but still down from above 119.80 yen ear­lier Tues­day.

The euro firmed to US$ 1.0639 from US$1.0628, while it was at 127.29 yen against 127.24 yen.

“Most of the fo­cus was on the (dollar) overnight with the re­lease of the March re­tail sales re­port,” Na­tional Australia Bank said in a com­men­tary.

“It was a slight miss, but much less so than the pre­vi­ous two re­ports.”

Re­tail sales re­bounded from a three-month slump in March, but the 0.9 per­cent gain was slightly weaker than es­ti­mated. Ex­clud­ing auto sales, re­tail sales rose only 0.4 per­cent in­stead of the 0.7 per­cent in­crease ex­pected.

The health of the world’s top econ­omy is seen as key to the tim­ing of a Fed­eral Re­serve in­ter­est rate hike.

The U.S. cen­tral bank has sig­naled that any rate rise — a plus for the dollar — largely de­pends on im­prov­ing eco­nomic data.

With the tepid U.S. fig­ures, the euro gained sup­port from a re­port show­ing eu­ro­zone industrial pro­duc­tion re­bounded a solid 1.1 per­cent in Fe­bru­ary af­ter fall­ing in Jan­uary.

The up­beat news comes af­ter the Euro­pean Cen­tral Bank launched a mas­sive bond-pur­chase pro­gram aimed at low­er­ing bor­row­ing costs and, in turn, boost­ing the tepid eu­ro­zone econ­omy.

The en­cour­ag­ing eu­ro­zone

re­port came ahead of the ECB’s mon­e­tary pol­icy meet­ing later Wed­nes­day.

On Tues­day, the yen picked up against the dollar and euro af­ter an eco­nomic ad­viser to Ja­panese Prime Min­is­ter Shinzo Abe said the unit had slid far enough.

In a tele­vi­sion in­ter­view Mon­day evening, Koichi Ha­mada added there was no need for the Bank of Ja­pan to ex­pand its mas­sive eas­ing plan, which has helped lop about 50 per­cent off the yen’s value since Abe launched an econ­omy-boost­ing pro­gram in early 2013.

“The BOJ’s mon­e­tary pol­icy is far bolder” than the ECB’s, Tetsuya Inoue, a for­mer BOJ of­fi­cial and the chief re­searcher for fi­nan­cial tech­nol­ogy and mar­kets at No­mura Re­search In­sti­tute, told Bloomberg News.

“The yen, which faces rel­a­tively larger eas­ing, is more prone to face sell­ing pres­sure than the euro.”

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