The dollar is losing ground against all of its major competitors Wednesday, following the release of some weaker than expected U.S. economic data. Producer prices dropped more than expected in September and retail sales increased by less than anticipated.
Investors will be watching for the release of the consumer price index Thursday morning for further clues regarding when the Federal Reserve will begin raising rates. The central bank will be paying particular attention to inflation and employment data when the decision is ultimately made.
Producer prices in the U.S. fell by more than anticipated in the month of September, according to a report released by the Labor Department on Wednesday, with the decrease largely reflecting a steep drop in energy prices.
The Labor Department said its producer price index for final demand fell by 0.5 percent in September after coming in unchanged in August. Economists had expected the index to dip by 0.2 percent.
Largely reflecting a jump in auto sales, the Commerce Department released a report on Wednesday showing a modest uptick in U.S. retail sales in the month of September. The report said retail sales edged up by 0.1 percent in September, while economists had expected sales to rise by 0.2 percent.
Business inventories in the U.S. came in nearly flat for the second straight month in August, the Commerce Department revealed in a report on Wednesday. The report said business inventories came in virtually unchanged in August after revised data showed that inventories were also unchanged in July.
Economists had expected inventories to inch up by 0.1 percent, matching the modest increase originally reported for the previous month.
The dollar has been losing ground against the Euro for over a week and has dropped to nearly a 1-month low of $1.1450, from around $1.1390 this morning.
Eurozone industrial production declined at the fastest pace in a year in August, Eurostat reported Wednesday. Industrial output fell 0.5 percent in August from prior month, reversing a revised 0.8 percent rise in July. This was the biggest fall since last August, when output fell 1 percent. Economists had forecast a 0.5 percent fall.
France’s EU measure of inflation remained stable in September, data published by the statistical office Insee showed Wednesday. The harmonized index of consumer prices edged up 0.1 percent year-on-year in September, the same rate as seen in August and in line with expectations.
The buck has fallen to a 3-week low of $1.5465 against the pound sterling Wednesday, from yesterday’s high of $1.52.
The U.K. unemployment rate declined in three months to August and the employment rate hit a record high, data from the Office for National Statistics showed Wednesday. The ILO jobless rate fell to 5.4 percent in three months to August from 5.6 percent in March to May period. The rate was expected to be at 5.5 percent.
The greenback has slipped to a week and a half low of Y118.895 against the Japanese Yen this afternoon, from around Y120 yesterday.
The leading economic index in Japan was up 0.2 percent in August, the Conference Board said on Wednesday, following the 0.1 percent decline in July.
Producer prices in Japan were down 0.5 percent on month in September, the Bank of Japan said on Wednesday – missing forecasts for a decline of 0.4 percent following the 0.6 percent contraction in August.
The material has been provided by InstaForex Company – www.instaforex.com