The dollar extended its earlier decline against a basket of currencies on Friday, July 13, as weaker-than-forecast data on consumer prices and retail sales in June raised doubts about U.S. economic growth.
At 8:35 a.m. (1235 GMT), the index that tracks the greenback versus a group of six major currencies was down 0.36 percent at 95.385.
Dollar falls after weak read on inflation, extending week’s decline The U.S. Dollar Index DXY, -0.49% which measures the currency against a half-dozen rivals, dropped 0.5% to 95.29 and fell to its lows of the session in the wake of the data. Earlier, it had moved as high as 95.83, a level that represented a slight gain from Thursday. The WSJ Dollar index BUXX, -0.56% which looks at the buck against a wider basket of currencies, was down 0.6% to 87.42.
The greenback is down 0.7% so far this week, with trading largely driven by dovish comments from Fed Chairwoman Janet Yellen, who reiterated the central bank’s plan to raise interest rates further, but also cautioned that rates don’t need to rise significantly from here.
The consumer price index was unchanged in June; expectations were for 0.1% growth. Furthermore, the rate of inflation over the past 12 months slowed 1.6% in June from 1.9% in the prior month, and it is down from five-year high of 2.7% just five months ago.
Separately, retail sales fell 0.2% last month, suggesting the U.S. economy hadn’t rebounded as strongly in the spring as bullish investors had been hoping.
Among the so-called commodity currencies, which have a higher correlation to the price of crude oil, the dollar fell 0.9% against the Russian ruble USDRUB, -0.9474% and 0.2% against the Canadian dollar USDCAD, -0.4087%
The pound GBPUSD, +1.1128% moved higher, extending recent gains that came after hawkish comments from Bank of England policy maker Ian McCafferty, who called for an early end to the central bank’s quantitative easing program.
Sterling bought $1.3033, breaking above the $1.30 level for the first time since July 3. Late Thursday, it traded at $1.2940. The pound has swung in a range of $1.3041 and $1.2984 on Friday, but it is on track for a gain of 1.1% on the week.
The euro EURUSD, +0.4562% fetched $1.1451, up 0.5% from $1.1399 on Thursday. For the week, it is looking at a rise of 0.5%.
The dollar traded lower against the yen USDJPY, -0.61% buying ¥112.38 from ¥113.28. Amid recent weakness in the dollar, the yen has been used as a safe-haven trade, and is up 1.4% this week.