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Forex - Dollar Holds Near 1-Week Lows after U.S. Data

ForexMar 14, 2018 09:12AM ET
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© Reuters. Dollar holds near 1-week lows after U.S. data - The dollar held near one-week lows against the other major currencies on Wednesday as soft U.S. retail sales data and heightened tensions over global trade continued to weigh on investor sentiment.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was little changed for the day at 89.75 by 08:57 AM ET (12:57 GMT).

Data released on Wednesday showed that U.S. retail sales fell 0.1% in February. It was the third consecutive monthly decline, raising fears over a slowdown in growth in the first quarter.

At the same time, another report showed that U.S. producer prices rose slightly more than expected last month.

The reports came a day after data showing that U.S. consumer price inflation remained muted in February, cementing expectations that the Federal Reserve is unlikely to raise rates more than three times this year.

The Fed is to hold a two-day policy meeting starting next Tuesday and is widely expected to hike rates for the first time this year.

Concerns over political and trade uncertainties also weighed on market sentiment; following reports Tuesday that U.S. President Donald Trump is seeking to impose tariffs on $60 billion of Chinese imports, targeting the technology and telecommunications sectors.

Trade tensions had already mounted after Trump last week announced plans to levy tariffs on steel and aluminum imports.

The dollar was a touch higher against the euro, with EUR/USD sliding 0.14% to 1.2373 as dovish remarks by European Central Bank officials weighed on the single currency.

ECB President Mario Draghi said earlier Wednesday that officials still need to see more evidence that inflation is moving closer to its target of just below 2% before it would consider the removal of monetary stimulus.

The dollar was little changed against the yen, with USD/JPY last at 106.52.

The yen had come under pressure since the start of the week amid a growing cronyism scandal linked to the Japanese Prime Minister Shinzo Abe and his wife involving the sale of public land.

The scandal raised concerns over Abe’s ability to continue pursuing his Abenomics policies, which include aggressive monetary easing.

The pound was steady against the dollar, with GBP/USD most recently at 1.3965.

Forex - Dollar Holds Near 1-Week Lows after U.S. Data

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