Dollar Snaps Six-Day Slump Before Retail-Sales Report
NEW YORK (Aug 13) The dollar gained versus the majority of its 16 most-traded peers before U.S. data forecast to show tomorrow that retail sales rose for a fourth month, backing the case for the Federal Reserve to reduce stimulus.
The yen fell the most in a week against the dollar after a report showed Japan’s economy slowed more than analysts forecast, fueling speculation the central bank will need to boost measures to spur growth. The Bloomberg U.S. Dollar Index rose for the first time in seven days as two regional Fed economists said the effect of stimulus efforts has been more limited than estimated. South Africa’s rand fell as stocks dropped, damping demand for higher-yielding assets.
“Forward expectations are certainly helping the dollar to push sharp gains,” Ravi Bharadwaj, a senior market analyst in Washington at Western Union Business Solutions, a unit of Western Union Co., said in a phone interview. “Market participants are hyper-sensitive to data right now, so you’d expect a strong dollar reaction if there’s a deviation from what investors have predicted. There’s also been a bit of profit-taking.”
The Bloomberg U.S. Dollar Index added 0.4 percent to 1,020.54 at 5 p.m. New York time, the biggest intraday gain since Aug. 1.
The greenback increased 0.3 percent to $1.33 per euro.