European Session – Euro and sterling rise after weak US data hurt dollar
February 13, 2014 2:18 pm
The main theme of the currency markets today was dollar weakness, which built up throughout the European session and culminated with the release of soft US retail sales data as well as disappointing weekly jobless claims numbers.
Retail sales fell 0.4% in January, led by a drop in automobile sales. They were expected to remain flat. December sales fell by a revised 0.1%. Meanwhile, retail sales excluding autos came in worse than forecast and were flat in January. Most analysts expected a growth of 0.1%. This was the first time there was no growth since March 2013. Meanwhile, December sales rose 0.2% in December.
The data are important because household consumption accounts for more than two-thirds of the growth of the US economy and thus helps contribute to overall GDP.
Another disappointing US data release showed weekly jobless claims rose 8,000 last week (ending February 8) to bring the total to a seasonally adjusted 339,000 claims versus the 330,000 estimated. This was up from 331,000 the prior week.
As a result of the weak data, the dollar fell across the board, helping the euro and the pound as well as the yen extend their gains today.
On the day, the euro gained 0.5% against the dollar to end the European session at 1.3665. Immediately after the US data, the euro spiked to a high of 1.3691.
The pound made new highs today, peaking at 1.6672, the strongest level since May 2011 and up 0.3% against the dollar on the day so far.
The general dollar sell-off after the US data led the dollar/ yen pair to fall back below the key 102.00 level. The greenback ended with a 0.6% loss versus yen so far today.
The main theme of the currency markets today was dollar weakness, which built up throughout the European session and culminated with the release of soft US retail sales data as well as disappointing weekly jobless claims numbers.
Retail sales fell 0.4% in January, led by a drop in automobile sales. They were expected to remain flat. December sales fell by a revised 0.1%.
Meanwhile, retail sales excluding autos came in worse than forecast and were flat in January. Most analysts expected a growth of 0.1%. This was the first time there was no growth since March 2013. Meanwhile, December sales rose 0.2% in December.
The data are important because household consumption accounts for more than two-thirds of the growth of the US economy and thus helps contribute to overall GDP.
Another disappointing US data release showed weekly jobless claims rose 8,000 last week (ending February 8) to bring the total to a seasonally adjusted 339,000 claims versus the 330,000 estimated. This was up from 331,000 the prior week.
As a result of the weak data, the dollar fell across the board, helping the euro and the pound as well as the yen extend their gains today.
On the day, the euro gained 0.5% against the dollar to end the European session at 1.3665. Immediately after the US data, the euro spiked to a high of 1.3691.
The pound made new highs today, peaking at 1.6672, the strongest level since May 2011 and up 0.3% against the dollar on the day so far.
The general dollar sell-off after the US data led the dollar/ yen pair to fall back below the key 102.00 level. The greenback ended with a 0.6% loss versus yen so far today.
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