Breaking News

Weak U.S. retail sales pressure dollar/yen; euro weakens

ForexFeb 14, 2019 10:45PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. FILE PHOTO: Euro, Hong Kong dollar, U.S. dollar, Japanese yen, pound and Chinese 100 yuan banknotes are seen in this picture illustration

By Vatsal Srivastava

SINGAPORE (Reuters) - The dollar edged lower versus the yen on Friday as dismal U.S. retail sales data reinforced expectations the Federal Reserve will not raise rates this year, while the market awaited developments in trade talks between Washington and Beijing.

U.S. retail sales posted their largest decline since September 2009, data showed on Thursday, a sign of weakness in the consumer sector, which accounts for more than two-thirds of the economy.

"Poor retail sales data has reinforced the view that the Fed will most likely keep rates steady this year," said Nick Twidale, chief operating officer, Rakuten Securities Australia.

"Dollar/yen is indicative of the risk averse sentiment right now...I am expecting the yen crosses to appreciate along with the Swiss franc."

The dollar lost about 0.5 percent against the safe-haven yen in the overnight session and was down 0.2 percent to 110.26 in Asian trade. The yen rose 0.24 percent versus the euro to 124.48, having gained around 0.2 percent on Thursday.

The Aussie and New Zealand dollars pared earlier gains, losing 0.3 percent to $0.7085 and $0.6816, respectively. Despite Friday's losses, the kiwi is set to end the week higher by one percent. Earlier this week, the Reserve Bank of New Zealand sounded less dovish on policy than speculators had wagered on, leading traders to place bullish bets on the currency.

The dollar index, a gauge of its strength versus six major peers was marginally higher at 97.07, after weakening by 0.12 percent in the previous session.

The main focus for the Asian market on Friday remains the outcome of the high level trade talks between the United States and China this week.

Markets had earlier in the week cheered U.S. President Donald Trump's upbeat assessment of the talks.

White House economic adviser Larry Kudlow said the administration's top two negotiators would meet on Friday with Chinese President Xi Jinping but that there had been no decision to extend a March 1 deadline for a deal. Bloomberg had earlier reported that Trump was considering a six-day extension of the deadline.

U.S. tariffs on $200 billion worth of imports from China are scheduled to rise to 25 percent from 10 percent if the two sides don't reach a deal by then, increasing pain and costs in sectors from consumer electronics to agriculture.

Rakuten's Twidale said that any negative news flow out of the trade discussions could push the dollar back up again, given investor demand for safe-haven assets during times of uncertainty.

The euro was 0.1 percent lower at $1.1284. The single currency has lost 0.4 percent this week and is down by 1.7 percent year to date thanks to weaker-than-expected euro zone data. Analysts expect the European Central Bank to keep monetary policy accommodative for the rest of the year, which will most likely keep a lid on the single currency.

Elsewhere, sterling was down 0.16 percent at $1.2791. Traders expect the pound to remain volatile in the coming weeks. Sterling is set to finish the week 1.2 percent lower versus the dollar, its third straight week of losses.

British Prime Minister Theresa May suffered a defeat on her Brexit strategy on Thursday that undermined her pledge to European Union leaders to get her divorce deal approved if they grant her concessions.

The United Kingdom is on course to leave the European Union on March 29 without a deal unless Prime Minister Theresa May can persuade the bloc to amend the divorce deal she agreed last year.

Weak U.S. retail sales pressure dollar/yen; euro weakens

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email