US dollar hit by poor retail sales

Published: 15 Jan at 5 AM Tags: Euro, Dollar,

A significant fall in retail sales in the US has put pressure on the dollar. The disappointing data now makes it more likely that the Federal Reserve will push its introduction of a hike in interest rates. Many analysts believed the rise would come in June.

Although the dollar is currently trading at 117.33 yen, it earlier dropped as low as 116.07 yen, a level not seen since the middle of December. The euro has managed to pull away from a trough of $1.1728, its lowest level in nine years, to hit $1.1789.

The dollar index has fallen back from last week’s nine-year high of 92.528 to 92.086. The index is a measure of the greenback’s performance against a basket of major world currencies. The dollar is likely to be given some support ahead of a policy meeting at the European Central Bank later this month when a sovereign-bond buying programme could be announced.

The euro has dropped against the yen to trade at 137.02, the lowest the currency has been in more than two months. Last month the single currency hit a six-year peak of 149.79.

The Australian dollar has managed to pull back ground against the dollar from $0.8068 to $0.8146. The Aussie will next be tested when employment data is published.