Dollar Declines After Dismal U.S. Retail Sales Data

Date : 02/14/2019 @ 5:24PM
Source : RTTF2
Stock : United States Dollar vs Canadian Dollar (USDCAD)
Quote : 1.32285  0.0025 (0.19%) @ 9:05PM
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Dollar Declines After Dismal U.S. Retail Sales Data

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The U.S. dollar drifted lower against its major counterparts in the European session on Thursday, following a slew of downbeat data on U.S. retail sales, producer prices and initial jobless claims that added to concerns over an economic slowdown in the world's largest economy.

Data from the Commerce Department showed a significant decrease in retail sales unexpectedly for December.

The Commerce Department said retail sales tumbled by 1.2 percent in December after inching up by a revised 0.1 percent in November.

Economists had expected retail sales to rise by 0.2 percent, matching the uptick originally reported for the previous month.

Excluding a jump in auto sales, retail sales plunged by an even steeper 1.8 percent in December after coming in unchanged in November. Ex-auto sales had been expected to edge up by 0.1 percent.

Adding to the negative sentiment, a report from the Labor Department showed first-time claims for U.S. unemployment benefits unexpectedly increased in the week ended February 9th.

The report said initial jobless claims rose to 239,000, an increase of 4,000 from the previous week's revised level of 235,000. Economists had expected jobless claims to drop to 225,000.

Meanwhile, a separate Labor Department report showed producer prices in the U.S. unexpectedly edged lower in the month of January.

The Labor Department said its producer price index for final demand slipped by 0.1 percent for the second straight month in January. Economists had expected the index to inch up by 0.1 percent.

Excluding steep drops in food and energy prices, core producer prices increased by 0.3 percent in January after coming in unchanged in December. Core producer prices were expected to rise by 0.2 percent.

The greenback rose against its major counterparts in the Asian session, with the exception of the pound.

The greenback dropped to 1.0061 against the franc, from a 3-day high of 1.0098 seen at 3:00 am ET. If the greenback drops further, 0.99 is possibly seen as its next support level.

Having risen to a 1-1/2-month high of 111.13 against the yen at 10:45 pm ET, the greenback reversed direction and dropped to 110.68. On the downside, 108.00 is likely seen as the next support level for the greenback.

Data from the Cabinet Office showed that Japan's gross domestic product expanded a seasonally adjusted 0.3 percent on quarter in the fourth quarter of 2018.

That was shy of expectations for a gain of 0.4 percent following the 0.6 percent contraction in the three months prior.

After rising to a 3-month high of 1.1249 against the euro at 5:30 pm ET, the U.S. currency retreated and reached as low as 1.1310. The greenback is seen finding support around the 1.15 level.

Preliminary data from the Federal Statistical Office showed that Germany's economy stagnated in the fourth quarter of 2018, thus it avoided a technical recession, which is two consecutive quarters of contraction.

Gross domestic product was unchanged from the third quarter, when the economy shrunk 0.2 percent. Economists were looking for a modest increase of 0.1 percent.

The greenback eased slightly to 1.2840 against the pound after the data, from more than a 4-week high of 1.2799 set at 7:00 am ET. The greenback is poised to find support around the 1.30 level.

The greenback hit an 8-day low of 0.6856 against the kiwi, off an early high of 0.6793. The next possible support for the greenback is seen around the 0.70 region.

On the flip side, the greenback appreciated to a 3-day high of 1.3317 against the loonie, from yesterday's closing value of 1.3254. Next key resistance for the greenback is seen around 1.35 level.

The greenback held steady at 0.7107 against the aussie, after having eased from a 2-day high of 0.7085 seen at 5:30 pm ET. At yesterday's close, the pair was worth 0.7088.

The U.S. business inventories for November are due at 10:00 am ET.

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