The U.S. dollar declined against its major rivals on Tuesday, trimming early gains, as retail sales decreased unexpectedly in June, renewing doubts about September rate hike by the Federal Reserve.
The Commerce Department released a report showing that retail sales fell by 0.3 percent in June after surging up by a downwardly revised 1.0 percent in May.
The pullback in sales surprised economists, who had expected sales to rise by 0.3 percent compared to the 1.2 percent jump originally reported for the previous month.
According to a report released by the Labor Department, import prices in the U.S. unexpectedly saw a modest decrease in the month of June, with a drop in non-fuel prices more than offsetting an increase in fuel prices.
The import price index edged down by 0.1 percent in June following a 1.2 percent increase in May. Economists had expected prices to inch up by 0.1 percent.
Meanwhile, the report said export prices fell by 0.2 in June after climbing by 0.6 percent in the previous month. Export prices had been expected to rise by 0.2 percent.
All eyes are now on Fed Chair Janet Yellen, who will give the Fed’s Semi-annual Monetary Policy Testimony before the House Financial Services Committee on Wednesday and before the Senate Banking Committee on Thursday. In a speech at Cleveland last Friday, Yellen backed her view of raising rates this year and indicated that most fundamental factors underlying economic activity were solid.
The greenback was trading higher on Monday, as the much awaited Greek debt deal triggered speculation that the U.S. Federal Reserve may tighten its monetary policy sooner rather than later. The currency rose 1.42 percent against the euro, 0.12 percent against the Swiss franc and 0.52 percent against the yen.
The currency added onto yesterday’s gains in today’s Asian session, but reversed its course during European deals.
The greenback depreciated to an 11-day low of 1.5632 against the pound, off early 4-day high of 1.5450. Further weakness may take the greenback to a support around the 1.57 mark. The pair was worth 1.5485 when it ended yesterday’s trading.
The greenback reversed from an early 1-1/2-month high of 0.9531 against the franc and edged down to 0.9399. If the greenback extends slide, 0.935 is possibly seen as its next support level. At Monday’s close, the pair was valued at 0.9499.
The greenback, having advanced to near a 3-week high of 123.72 against the yen at 8:45 pm ET, reversed direction with the pair trading at 122.91. The next key support for the greenback is likely seen around the 120.00 area. The pair was trading at 123.43 at yesterday’s close.
After advancing to a weekly high of 1.0964 against the euro in early deals, the greenback weakened and was trading at 1.1080. The greenback is seen finding support around the 1.12 level.
The greenback was trading lower at 1.2716 against the loonie and 0.6741 against the kiwi, coming off from early near 3-month high of 1.2804 and 6-day high of 0.6666, respectively. On the downside, the greenback may challenge support around 1.25 against the loonie and 0.69 against the kiwi.
The greenback hit a 4-day low of 0.7478 against the aussie, following an advance to 0.7387 at 8:45 pm ET. The greenback is poised to face support around the 0.76 area.
Looking ahead, U.S. business inventories data for May is set for release shortly.
The material has been provided by InstaForex Company – www.instaforex.com