Dollar tumbles after key U.S. data missed forecasts: July 17, 2017

Market Review - 15/07/2017  02:59GMT  

Dollar tumbles after key U.S. data missed forecasts

The greenback tumbled across the board on Friday as the release of lower-than-expected U.S. inflation and retail sales data raised concerns about when the Federal Reserve would hike its rates next.  
  
On the data front, the U.S. Commerce Department said that consumer prices was unchanged in June from a month earlier, compared to forecasts for 0.1% increase and a 0.1% drop in the prior month. Year-over-year, consumer prices increased 1.6% last month, below forecasts for a 1.7% increase and easing even further from the 1.9% advance seen in May.  
  
In the same report, the U.S. Commerce Department said that retail sales fell 0.2% in June from the prior month, below forecasts for a gain of 0.1%. May's retail sales decreased by 0.1% which was an upward revision from an initial 0.3% decline.  
  
Versus the Japanese yen, dollar met renewed selling at 113.58 in Asian morning and dropped to 113.15 in early European morning. Intra-day decline accelerated at New York open on the release of poor U.S. data and price hit an intra-day low at 112.27 before staging a short-covering rebound in New York morning.  
  
The single currency traded with a firm bias in Asia and gained to 1.1424 in early European morning. Price then jumped at New York open to 1.1469 on dollar's broad-based weakness before stabilizing. Despite intra-day sideways swings after the U.S. data, euro later climbed to session highs of 1.1472 at the close.  
  
The British pound also traded with a firm bias in Asia and gained to 1.2966 at European open. Intra-day ascent accelerated at New York open on the back of poor U.S. data and cable surged to a fresh 13-month high at 1.3093 in New York morning due partly to active cross-buying of sterling especially vs euro. Cable continued to inch higher in New York afternoon and hit a 10-month peak of 1.3114 near the close.  
  
In other news, Fed's Kaplan said 'U.S. near full employment; some of recent weak inflation is transitory, some not; technical disruption weakening economic pricing power; expect wage pressure to mount in months ahead; starting see more wage pressure for unskilled workers.'  
  
Data to be released this week:  
  
UK house price, Japan market holiday, China retail sales, GDP, EU CPI, core CPI and U.S. NY manufacturing on Monday.  
  
New Zealand CPI, China House Price Index, UK RPI, CPI, PPI input, PPI output, DCLG house price, U.S. export price, import price, redbook and NAHB housing market on Tuesday.  
  
Australia Westpac leading index, EU construction output, UK inflation report hearings, U.S. MBA mortgage, building permits, housing starts and Canada manufacturing sales on Wednesday.  
  
Japan imports, exports, trade balance, Australia NAB business confidence, employment change, unemployment rate, Japan interest rate decision, monetary policy statement, outlook report, all industry activity, press conference, Swiss trade balance, exports, imports, EU PPI, current account, deposit rate decision, interest rate decision, consumer confidence, monetary policy statement and press conference, U.S. initial jobless claims, Philadelphia Fed survey, UK retail sales and core retail sales on Thursday.  
  
UK PSNB, PSNCR, Italy retail sales, Canada retail sales, core retail sales, CPI and core CPI on Friday.