The U.S. Dollar gained against most of its counterparts after the Commerce Department reported the first increase in Retail Sales in four months, prompting the biggest hike in Treasury yields since May. According to official figures, sales climbed 0.8 percent in July after having declined 0.7 percent in June. The greenback was also supported by broadly higher Producer Prices which posted a 0.3 percent increase instead of the anticipated 0.2 percent.
The U.S. Dollar dipped to a three-month low against the Canadian currency as better than forecast economic reports out of the U.S. bolstered demand for risk assets. But the Loonie’s advance was capped after early day releases indicated that the economy in the Euro region contracted 0.2 percent in the second quarter of 2012.
The Euro weakened against the U.S. Dollar as better than expected Retail Sales and gains in Treasury yields boosted appeal for Dollar assets. The Euro had rallied versus the greenback after Germany reported its economy expanded 0.3 percent while France’s economy remained unchanged. However, the Euro erased gains after it was confirmed that the region’s economy shrank 0.2 percent between April and June. The Pound traded steady against the U.S. Dollar as sentiment fluctuated subsequent to the release of Euro-zone data which dampened appetite for risk. The Sterling dipped to the lowest level versus the Euro since August 9th after the Royal Institution for Chartered Surveyors indicated that House Prices plummeted in July to the lowest level in one year.
The Yen weakened against all of its counterparts after stocks gained and the minutes from the Bank of Japan’s most recent policy meeting revealed that officials are considering increasing monetary stimulus in the near future. The minutes were published one day after reports confirmed that the country’s economy expanded 0.3 percent in the second quarter.
Lastly, the South Pacific currencies hardly changed against the greenback as investors remain cautious in anticipation of soon to be released E.U. and the U.S. economic data. In New Zealand, Retail Sales rose 1.5 percent, which was more than economists had forecast, while Core Retail Sales, which exclude automobile sales, climbed 0.9 percent.
EUR/USD- E.U. Issues GDP
The Euro declined versus the U.S. Dollar following the release of less than impressive data showing that the region’s economy contracted 0.2 percent, prompting investors to question growth prospects for the E.U. The Euro was also weighed down by better than anticipated U.S. Retail Sales figures and by speculation that recent weak data pointing to a slowdown in global growth may cause major central banks to increase stimulus. Furthermore, the ZEW Center For Economic Research announced that the Index for German Economic Sentiment fell to -25.5 in August, the lowest this year.
GBP/USD- Home Prices Fall
The British Pound remained steady against the U.S. Dollar following a flurry of economic data which dampened demand for risk assets and boosted the appeal of the greenback. In the U.K., the Office of National Statistics indicated that Consumer Price Inflation advanced to a seasonally adjusted 2.6 percent last month, after analysts had predicted it would ease to 2.3 percent. Consumer Price Inflation gained 0.1 percent MoM after it declined 0.4 percent in June. And other releases showed that Home Prices fell in June to the lowest in a year. According to the London Royal Institution of Chartered Surveyors, the Home Price gauge dipped from -22 to -24.
AUD/USD- Business Confidence Improves
The Australian Dollar remained steady in anticipation of economic reports out of the Euro region. But sentiment benefitted the Aussie later in the day after reports out of Germany indicated that the E.U.s biggest economy expanded unexpectedly in the months between April and June. In Australia, a release revealed that the Index for Business Confidence advanced to 4 last month after it posted at -3 in June. Other data showed that New Motor Vehicle Sales slipped 0.8 percent after they fell 1 percent the prior month.
USD/JPY- Tertiary Industry Up In June
The Yen declined against all of its peers after the minutes from the Bank of Japan’s policy meeting indicated the possibility of further easing. The report was published after data showed that the nation’s economy expanded 0.3 percent in the second quarter after analysts predicted 0.6 percent growth. Other government releases revealed that the Tertiary Industry activity climbed 0.1 percent in June exceeding expectations for a 0.3 percent decline.
Today’s economic calendar shows that the U.K. will publish the Monetary Policy Meeting minutes, Claimant Count Change and the Average Earnings Index. The U.S. will report on CPI, Core CPI, The NY Empire State Manufacturing Index and Industrial Production.