The dollar is losing ground against its major competitors Wednesday, adding to the weakness of the previous trading session. The U.S. currency sold-off following the release of the weaker than expected retail sales report. The report reinforced the view that the Federal Reserve is not likely to raise interest rates next month.
In a sign of continued weakness in the retail sector, the Commerce Department released a report on Wednesday showing that U.S. retail sales were unexpectedly flat in the month of April. The report said retail sales were virtually unchanged in April following an upwardly revised 1.1 percent increase in March.
Economists had expected retail sales to edge up by 0.2 percent compared to the 0.9 percent growth originally reported for the previous month.
With falling non-fuel prices more than offsetting higher fuel prices, the Labor Department released a report on Wednesday showing an unexpected decrease in U.S. import prices in the month of April. The report said import prices fell by 0.3 percent in April following a revised 0.2 percent decrease in March. Economists had expected import prices to climb by 0.4 percent.
Meanwhile, the Labor Department also said export prices dropped by 0.7 percent in April after inching up by 0.1 percent in the previous month. Export prices had been expected to show another 0.1 percent uptick.
While the Commerce Department released a report on Wednesday showing another modest increase in U.S. business inventories in the month of March, the uptick in inventories missed economist estimates. The report said business inventories inched up by 0.1 percent in March after edging up by a downwardly revised 0.2 percent in February.
Economists had expected inventories to rise by 0.2 percent compared to the 0.3 percent increase originally reported for the previous month.
The dollar was trading around $1.1220 against the Euro early Wednesday, but has since dropped to a 4-session low of $1.1360.
Eurozone economic growth improved as expected in the first quarter as growth in France and Spain accelerated and Italy expanded, offsetting the weak performance of Germany.
Gross domestic product of the 19-nation bloc expanded 0.4 percent sequentially in the first quarter, slightly faster than the 0.3 percent growth seen in the fourth quarter of 2014, flash estimates published by Eurostat showed Wednesday. The growth rate matched economists’ expectations.
The German economy grew at a slower pace in the first quarter of the year, data released by Destatis showed Wednesday. Gross domestic product rose 0.3 percent sequentially, slower than the 0.7 percent expansion seen a quarter ago. It was also weaker than the 0.5 percent growth forecast by economists.
The French economic growth accelerated at a faster-than-expected pace in the first quarter, the statistical office Insee showed Wednesday. Gross domestic product grew 0.6 percent in the three months ended March, exceeding economists’ expectations for a 0.4 percent climb, after showing no variations in the previous quarter.
The Bank of England sees slower economic growth going forward, citing lower productivity and sterling strength, and suggested that the interest rate would be raised by the middle of 2016. Further, inflation is expected to return to its 2 percent target within two years.
The economy is forecast to expand 2.5 percent in 2015, slower than the prior projection of 2.9 percent, the central bank said in its quarterly Inflation Report, released Wednesday. The bank forecast 2.6 percent growth for next year instead of 2.9 percent.
Growth is projected to be at or a little below its historic average throughout the forecast period.
The buck has extended its losses against the British pound to a seventh consecutive session Wednesday, falling to over a 4-month low of $1.5740. The U.S. currency was trading around $1.5100 before the losing streak began.
U.K. unemployment declined to the lowest since 2008 during the first quarter of 2015 and earnings increased more than expected, data from the Office for National Statistics revealed Wednesday. The ILO jobless rate came in at 5.5 percent during January to March period compared to 5.7 percent in October to December quarter. The rate came in line with expectations. This was the lowest since 2008.
The greenback has fallen to a 4-session low of Y119.115 against the Japanese Yen this afternoon, from yesterday’s high of Y120.270.
A measure of peoples’ assessment of the Japanese economy improved for the fifth straight month in April, exceeding consensus estimate, survey data from the Cabinet Office showed Wednesday. The current index of the Economy Watchers’ survey rose to 53.6 in April from 52.2 in the previous month. Economists had expected the index to increase slightly to 52.3.
Japan posted a current account surplus of 2,795.3 billion yen in March, the Ministry of Finance said on Wednesday, surging more than 2,000 percent on year. The headline figure topped forecasts for a surplus of 2,061.3 billion yen and was up from 1,440.1 billion yen in February.
The material has been provided by InstaForex Company – www.instaforex.com