Dollar mixed after disappointing US retail sales report
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.”