Dollar falls on surprise drop in US retail sales
SPY•Yen gains on BOJ hike expectations
The dollar index =USD, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.33% to 99.59, with the euro EUR= up 0.36% at $1.1568.
The Japanese yen JPY= strengthened 0.32% against the greenback to 158.97 per dollar.
Despite Friday's gains, the yen was on track for a weekly decline of around 0.7% as the effects of recent U.S. and Japanese intervention continued to fade. That has left traders betting that either a rate hike or another round of official buying will be needed to arrest the currency's slide.
Reuters reported the Bank of Japan is set to raise rates as soon as September and is considering more aggressive hikes to follow. Since exiting a massive, decade-long stimulus in 2024, the BOJ has raised interest rates at a pace of roughly twice a year.
The yen was trading at 40-year lows near 164 per dollar before July's intervention, and traders see the 160 level as a potential trigger for fresh official action. Its retreat mirrors a similar selloff in May, when it also fell back after a round of official buying.
Dollar falls after weaker-than-expected retail sales
NEW YORK, Aug 14 (Reuters) - The dollar fell on Friday after data showed U.S. retail sales unexpectedly declined in July, as traders weighed Federal Reserve policy and the prospect of a Bank of Japan rate hike next month aimed at supporting the yen.
Retail sales dropped 0.6% last month after an unrevised 0.2% gain in June. Economists polled by Reuters had forecast retail sales, which are mostly goods and are not adjusted for inflation, edging up 0.1%.
“We are clearly having signs of poor consumption,” said Juan Perez, director of trading at Monex USA in Washington. “This evidence is clearly showing that there is an economic slowdown in the United States.”
