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U.S Dollar nearly unchanged against its rivals

by Paul
U.S Dollar

The U.S. dollar was roughly unchanged against its rivals on Thursday as analysts downplayed retail sales slump

The U.S. dollar was roughly unchanged against its rivals on Thursday as analysts downplayed data showing U.S. retail sales suffered their biggest drop since 2009.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.12% to 96.82.

The Commerce Department said on Thursday that retail sales fell 1.2% last month. That confounded economists’ forecasts for a 0.1% rise. The retail sales control group, which has a larger impact on U.S. GDP, fell 1.7%, missing expectations for not change.

CIBC said one weak reading shouldn’t prove worrisome as a strong labor market will lend support to consumer spending in the coming months.

The bank added that still, today’s data reinforces the Fed’s cautious stance for the time being and will weigh on the USD and see yields fall.

The lower retail sales print, however, saw regional Federal Reserve banks slash estimates for fourth-quarter GDP.

The U.S. economy’s estimated growth rate in the fourth quarter was cut to 1.5% from 2.7% by the Atlanta Federal Reserve after declines in retail sales and inventories.

EUR/USD rose 0.32% to $1.1301 even as data pointed to a slowdown in the German economy.

USD/JPY fell 0.33% to Y110.62.

GBP/USD fell 0.35% to $1.2799 after U.K. Prime Minister Theresa May suffered another defeat in parliament that leaves the option of a no-deal Brexit on the table.

May tabled a motion requesting U.K. lawmakers reiterate their support for the approach agreed on Jan. 29, when they backed an amendment allowing the prime minister to return to Brussels to negotiate the Irish backstop.

The motion was non-binding, with many looking toward the next vote to determine path for Brexit. May will return to parliament to face another vote at the end of the month, by which time the prime minister may have been able, though unlikely, to score tweaks to Irish backstop issue that U.K. lawmakers have suggested is needed in order to back the withdrawal agreement before March 29, when the UK is to leave the EU.

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