Dollar Falls As Positive Data Kills ECB Stimulus Chatter
Washington ( May 6) The dollar weakened against the euro on Tuesday after positive euro zone retail sales data diminished expectations for stimulus from the European Central Bank .
Euro area retail trade surprisingly increased 0.3% in March driven by food product sales, suggesting strong support to economic growth from consumer spending in the first quarter.
The dollar slipped to USD1.3915 versus the euro from USD1.3850 . Traders will be keeping an eye on technical support levels near USD1.40 to see if the dollar will further weaken.
Upbeat US exports data helped the dollar steady by mid-morning.
With the value of exports rebounding after showing a notable decrease in the previous month, the Commerce Department released a report on Tuesday showing that the US trade deficit narrowed in the month of March.
The Commerce Department said the trade deficit narrowed to USD40.4 billion in March from a revised USD41.9 billion in February.
In other currency pairs, the dollar dropped to Y101.50 versus the yen, easing from a 3-week high above Y102 .
The buck slipped to USD1.6985 from USD1.69 versus the sterling.
Traders largely shrugged off gloomy predictions on the global economy from the Organization for Economic Co-operation and Development .
OECD projected that the global economy will expand 3.4% in 2014, weaker than the 3.6% growth estimated in November. The OCED now expects US economy to grow 2.6% in 2014 and 3.5% in 2015.