Forex - Dollar falls as US retail sales figures disappoint
The dollar weakened against the euro after softer-than-expected US retail sales figures, although losses were limited ahead of Federal Reserve chairman Ben Bernanke's key testimony in Congress.
US retail sales for the US were in January from the previous month, against analysts' expectations of a 0.3 pct rise. The news saw the euro climb to 1.3090 usd, were it settled as the market awaited Bernanke's testimony to begin at 1500 GMT.
'US retail sales were a bit weaker than the market consensus which saw the euro strengthen against the dollar,' Niels From at Dresdner Kleinwort.
But From believes there will be no major movement until after Bernanke's speech.
'The market has already priced in positive comments from Bernanke on the US comment today, so if it is not up to expectations then we can expect to see the euro climb even higher against the dollar,' he added.
Sterling remained relatively stable after the Bank Of England said it expects inflation to drop below the 2 pct CPI annual rate over the next 12 months before settling at that level over the medium term.
The estimate is based on market prediction of one more UK rate hike in the second quarter.
'Reading between the lines it would appear the Monetary Policy Committe could be split between holding rates or implementing another hike to 5.50 pct,' said From.
He expects tomorrow's UK retail sales figures to support to the pound.
The market is now viewing last weekend's G7 meeting and as 'ancient history', according to From, and was looking ahead to GDP figures due out from Japan overnight.
'The market is looking for strong figures from Japan and if the data supports that view we'll see further benefits for the yen, but only marginal ones. The downside risk if the figures disappoint is greater.'
London 1435 GMT London 1045 GMT
US dollar
yen 121.09 up from 121.00
sfr 1.2425 dn from 1.2430
Euro
usd 1.3096 up from 1.3090
yen 158.58 up from 158.42
sfr 1.6274 up from 1.6270
stg 0.6691 dn from 0.6697
Sterling
usd 1.9570 up from 1.9549
yen 236.98 up from 236.48
sfr 2.4316 up from 2.4293
Australian dollar
usd 0.7824 up from 0.7816
stg 0.3999 up from 0.3998
yen 94.775 up from 94.575
US retail sales for the US were in January from the previous month, against analysts' expectations of a 0.3 pct rise. The news saw the euro climb to 1.3090 usd, were it settled as the market awaited Bernanke's testimony to begin at 1500 GMT.
'US retail sales were a bit weaker than the market consensus which saw the euro strengthen against the dollar,' Niels From at Dresdner Kleinwort.
But From believes there will be no major movement until after Bernanke's speech.
'The market has already priced in positive comments from Bernanke on the US comment today, so if it is not up to expectations then we can expect to see the euro climb even higher against the dollar,' he added.
Sterling remained relatively stable after the Bank Of England said it expects inflation to drop below the 2 pct CPI annual rate over the next 12 months before settling at that level over the medium term.
The estimate is based on market prediction of one more UK rate hike in the second quarter.
'Reading between the lines it would appear the Monetary Policy Committe could be split between holding rates or implementing another hike to 5.50 pct,' said From.
He expects tomorrow's UK retail sales figures to support to the pound.
The market is now viewing last weekend's G7 meeting and as 'ancient history', according to From, and was looking ahead to GDP figures due out from Japan overnight.
'The market is looking for strong figures from Japan and if the data supports that view we'll see further benefits for the yen, but only marginal ones. The downside risk if the figures disappoint is greater.'
London 1435 GMT London 1045 GMT
US dollar
yen 121.09 up from 121.00
sfr 1.2425 dn from 1.2430
Euro
usd 1.3096 up from 1.3090
yen 158.58 up from 158.42
sfr 1.6274 up from 1.6270
stg 0.6691 dn from 0.6697
Sterling
usd 1.9570 up from 1.9549
yen 236.98 up from 236.48
sfr 2.4316 up from 2.4293
Australian dollar
usd 0.7824 up from 0.7816
stg 0.3999 up from 0.3998
yen 94.775 up from 94.575
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