Dollar falls on surprise drop in US retail sales
TLT•Dollar falls after weak retail sales data
The dollar fell on Friday after data showed U.S. retail sales unexpectedly declined in July, helping send the euro and sterling to multi-month highs, as traders weighed Federal Reserve policy.
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.”
Fed expectations shift after softer inflation and labor data
Softer-than-expected consumer and producer price inflation data this week has already tempered expectations that the Fed will raise rates at its September 15-16 meeting. Traders are now pricing in just a 31% probability of a September hike, alongside a 69% chance of a rate increase by December.
