Dollar gains ground on yen and other currencies
Published: 15 Aug at 2 PM
Positive retail sales from the US help the dollar climb to a one-month high versus the Japanese yen on Wednesday and calmed talks of the Federal Reserve launching further monetary stimulus to support the economy.
Data from the US revealed that retail sales had gone up for the first time in four months, a factor that raised the likelihood of the economic growth slowdown seen in Q2 would be temporary. The data also led to US Treasury yields moving upwards.
The greenback saw daily gains of over 0.5 per cent against the yen to hit 78.94. It later fell back to 78.74 yen. Meanwhile, the currency also moved up against the Australian dollar and the euro. The Aussie fell to a one-and-a-half-week trough of $1.0487 and the euro dropped to $1.2318, falling back from a high recorded on Tuesday of $1.2386.
Later on Wednesday, data will be released on consumer inflation in the US, which is forecast to have remained broadly unchanged since June, and industrial output, which is expected to have sped up slightly in July.
Meanwhile, data from Europe on Tuesday was marginally better than expected, with GDP in France and Germany ahead of forecasts. However, as forecast, the region’s economy contracted in Q2 and economists issued a warning that Germany was unlikely to remain in positive territory for much longer unless measures are introduced to combat the debt crisis in the euro zone.