News Column

Dollar Rally Loses Steam As Retail Sales Disappoint

May 14, 2014



WASHINGTON (Alliance News) - The dollar's rally against the euro petered out on Wednesday, even as downbeat eurozone factory data cemented expectations for stimulus from the European Central Bank.

Eurozone eurozone industrial production dropped in March, driven by declines in the output of the big four countries, raising concerns over the strength of the region's economic recovery.

Production shrunk 0.3% in March following a 0.2% increase in the previous month.

This was in line with economists' expectations, and may compel the ECB to finally act in June.

Meanwhile, there was little reaction to data showing that US retail sales inched up by less than expected in the month of April.

The report said retail sales edged up by 0.1% in April after surging up by an upwardly revised 1.5% in March.

The dollar was stuck at USD1.37 versus the euro, having picked up about 3 cents over the past week.

Early losses took the dollar to Y101.75 versus the yen, but the dollar inched up to USD1.6775 versus the sterling.

The Bank of England on Wednesday settled market speculations over an early interest rate hike, saying it was necessary to absorb the slack in the economy before tightening policy rates.

BoE governor Mark Carney said rates may remain low "for some time".



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Source: Alliance News


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