Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

EUR/USD dips as dollar gains on solid U.S. retail sales

Published 04/14/2014, 12:08 PM
Updated 04/14/2014, 12:10 PM

Investing.com - The euro slid against the dollar on Monday after data revealed U.S. retail sales beat expectations last month, driving hopes that U.S. recovery may be gaining steam after a rough winter disrupted commerce.

In U.S. trading, EUR/USD was down 0.48% at 1.3819, up from a session low of 1.3808 and off a high of 1.3863.

The pair was likely to find support at 1.3673, the low from April 4, and resistance at 1.3905, Friday's high.

The Commerce Department reported earlier that U.S. retail sales rose 1.1% in March, exceeding expectations for a 0.8% gain. Retail sales in February were revised up to a 0.7% increase from a previously estimated 0.3% rise.

Core retail sales, which exclude automobiles, rose 0.7% last month, beating expectations for a 0.5% reading, after a 0.3% gain in February

Consumer demand drives the bulk of U.S. economic output, and the numbers fueled expectations that the Federal Reserve will continue to wind down its monthly asset-purchasing program as the year unfolds.

Fed asset purchases, currently standing at $55 billion a month, weaken the greenback by suppressing borrowing costs to spur recovery, though talk of waning monetary intervention often strengthens the U.S. currency.

Elsewhere in the U.S., data revealed U.S. business inventories rose less than expected.

In a report, Census Bureau reported earlier that U.S. business inventories rose 0.4% in February from 0.4% in the preceding month.

Analysts were expecting a 0.5% reading in February.

Meanwhile across the Atlantic, the euro slid after ECB President Mario Draghi said Saturday that further gains in the euro would trigger additional monetary easing to keep consumer prices in comfort zones.

"A strengthening of the exchange rate requires further monetary stimulus. That is an important dimension for our price stability," he said.

ECB governing council member and Bank of France governor Christian Noyer said Monday that a weaker euro is desirable, adding that the stronger the currency is the more "accommodating" monetary policy needs to be.

Elsewhere, investors shrugged off data showing that industrial production in the euro area rose 0.2% in February from a month earlier, pushing the annual rate up to 1.7%.

Market expectations had been for an annual gain of 1.5% and a monthly increase of 0.2%.

The euro was down against the pound, with EUR/GBP down 0.50% to 0.8258, and up against the yen, with EUR/JPY down 0.24% at 140.78.

On Tuesday, the ZEW Institute is to release its closely watched report on German economic sentiment, a leading indicator of economic health.

In the U.S. later Tuesday, Fed Chair Janet Yellen is to speak; her comments will be closely watched.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.