Dollar Bounces Off After Solid U.S. Retail Sales
September 13 2019 - 6:03AM
RTTF2
The U.S. dollar moved off from its early lows against its most
major opponents in the European session on Friday, as U.S. retail
sales climbed more than expected in August driven by a jump in auto
sales.
Data from the Commerce Department showed that retail sales rose
by 0.4 percent in August after climbing by an upwardly revised 0.8
percent in July.
Economists had expected retail sales to rise by 0.2 percent
compared to the 0.7 percent increase originally reported for the
previous month.
Excluding the jump in auto sales, retail sales came in unchanged
in August after surging up by 1.0 percent in July. Ex-auto sales
had been expected to inch up by 0.1 percent.
Data from the Labor Department showed a slightly bigger than
expected decrease in U.S. import prices in the month of August.
The report showed import prices fell by 0.5 percent in August
after inching up by a downwardly revised 0.1 percent in July.
Economists had expected import prices to drop by 0.4 percent.
The currency declined against its major counterparts in the
Asian session, excepting the yen. The fall was due to its
safe-haven status, as trade tensions lessened after China's
Ministry of Commerce revealed plans to exempt U.S. agricultural
products, including soybeans and pork, from additional tariffs.
China will add the agricultural products to a list of 16 types
of American-made products granted tariff exemptions as a sign of
goodwill ahead of the next round of trade talks.
The greenback recovered to 108.14 against the yen, from a low of
107.91 seen at 3:00 am ET. This may be compared to a 1-1/2-month
peak of 108.26 it recorded in the Asian session. Next key
resistance for the greenback is likely seen around the 111.00
level.
Final data from the Ministry of Economy, Trade and Industry
showed that Japan's industrial production expanded as estimated in
July.
Industrial production rose 1.3 percent month-on-month in July,
in line with the preliminary estimate.
Following a weekly decline to 0.9854 against the franc at 7:45
am ET, the greenback regained some traction and rose back to
0.9881. The greenback is likely to challenge resistance around the
1.00 region.
The greenback reversed from its early more than a 2-week low of
1.1109 against the euro, recovering to 1.1079 after the data. The
greenback is poised to test resistance around the 1.09 mark.
Data from Eurostat showed that the euro area trade surplus
increased in July on higher exports.
The trade surplus rose to a seasonally adjusted EUR 19 billion
from EUR 17.7 billion in June.
The greenback appreciated to weekly highs of 0.6376 against the
kiwi and 1.3243 against the loonie from yesterday's closing values
of 0.6405 and 1.3210, respectively. If the greenback strengthens
further, it is likely to face resistance around 0.62 against the
kiwi and 1.35 against the loonie
In contrast, the greenback held steady against the pound,
following a fresh 7-week low of 1.2475 hit at 5:30 am ET. The pair
had closed yesterday's deals at 1.2329.
Although the greenback staged a modest recovery against the
aussie after the data, it was short lived. The greenback was
trading lower at 0.6878 against the aussie, compared to yesterday's
closing value of 0.6866. The next possible support for the
greenback is seen around the 0.71 region.
The U.S. business inventories for July and University of
Michigan's consumer sentiment index for September are slated for
release in the New York session.
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