Currencies: Dollar falls after weaker-than-expected retail sales rise

NEW YORK (MarketWatch) — The dollar declined against its rivals Tuesday after U.S. retail sales for March missed estimates.

The euro EURUSD, +0.92% traded at $ 1.0613 after the data, compared with $ 1.0575 earlier in the day. The single currency traded at $ 1.0569 in the previous session.

After three consecutive months of declines, retail sales saw a return to growth in March. But the rebound wasn’t as large as economists had expected.

“I think the market is looking at ex-autos and the fact that it came in at 0.4% rather than 0.7%. This isn’t as strong as the market would have hoped,” said Doug Borthwick, head of foreign exchange at Chapdelaine & Co.

“There was an expectation that there would have been a large snapback in March — and that hope has been dashed by today’s number.”

At 0.2%, the Bureau of Labor Statistics’ producer price index, a measure of inflation at the wholesale level, came in slightly below expectations for a rise of 0.3%.

“The Fed is looking for some sort of inflation, and that’s not yet showing up in the data,” Borthwick said.

The ICE dollar index DXY, -0.81% a measure of the dollar’s strength against a basket of six currencies, slipped to 99.07, compared with 99.51 on Monday.

The pound GBPUSD, +0.63% which hit a five-year low of $ 1.45655 Monday afternoon, rose to $ 1.4722 after the data. The pound had weakened earlier in the session after Britain’s official statistics agency said that consumer prices were flat in March.

After the U.S. data, the dollar USDJPY, -0.53%  dropped to 119.47 yen, from ¥120.13 late Monday in New York.

The dollar added to losses against the yen from Monday’s session that followed remarks from Koichi Hamada, one of Japanese President Shinzo Abe’s economic advisers, who said that the dollar at ¥120 was excessively weak for the yen, and that a fair value was around ¥105.

In subsequent remarks on Tuesday, Hamada reportedly said that yen selling was reaching its limits.

Singapore

The dollar sold off against the Singapore dollar after monetary authorities in Singapore opted to keep the city-state’s monetary policy unchanged, surprising the market, which had expected policy makers to adopt further easing measures to help weaken the currency.

The U.S. dollar USDSGD, -0.87%   traded at 1.3585 Singapore dollars, its lowest level in five days, from around 1.3720 early Tuesday.

In other markets, bond yields fell and U.S. stock futures pointed to a slightly weaker open.

Dollar Index

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