In today’s news update we cover retail sales and overall effects on the US dollar.
In a setback for the U.S. economic recovery, retail sales unexpectedly fell hard in May as consumers pulled back their spending on things from cars to clothing.
Retail sales tumbled 1.2%, the Commerce Department said Friday. Economists surveyed by Dow Jones Newswires were expecting a 0.2% increase. The decline was the biggest — and the first — since September 2009, when sales fell 2.2%.
NEW YORK — The dollar resumed its rise Friday against the euo and other major currecnies after weak U.S. retail sales data sent investors in search of safety.
The euro dropped to $1.2084 from $1.2095 late Thursday. Before the government released the retail report, it rose as high as $1.2152, its highest level in a week.
The British pound fell to $1.4569 from $1.4702, while the dollar rose to 91.45 Japanese yen from 91.20 yen.
The dollar is the most actively traded currency in the world. It is easy for anxious investors to buy and sell the currency when they worry about volatile financial markets and risks to the recovery from the recession. Perceived as a safe bet, it has rallied this year because of worries about Europe’s economic problems and a possible slowdown in China.
June 11 (Bloomberg) — Sales at U.S. retailers unexpectedly dropped in May, signaling consumers boosted savings as employment slowed and stocks fell.
Purchases decreased 1.2 percent, the biggest drop since September 2009, following a 0.6 percent April gain that was larger than previously estimated, Commerce Department figures showed today in Washington. Demand plunged at building-material stores, reflecting the end of a government appliance rebate, and sales fell at auto dealers, in contrast to industry figures which showed a gain.
June 11 (Bloomberg) — The dollar rose against the euro for the first time in four days after an unexpected drop in U.S. retail sales raised concern the global economic recovery may be slowing, spurring demand for the currency as a haven.
The Australian dollar fell against the greenback after data today showed China’s inflation quickened to the fastest pace in 19 months, fanning concern the nation may take steps to cool its economy. The dollar rose against most of its major counterparts as stocks and oil fell, reducing demand for growth-linked currencies.