U.S. Dollar At 2-day High Against Japanese Yen After Upbeat Retail Sales Data
July 16 2021 - 5:00AM
RTTF2
The U.S. dollar extended its early rally against the Japanese
yen in the European session on Friday, after a data showed that the
nation's retail sales increased unexpectedly in June, in an
indication of a strengthening of the economy.
Data from the Commerce Department showed that retail sales
climbed by 0.6 percent in June after plunging by a revised 1.7
percent in May.
The rebound surprised economists, who had expected retail sales
to fall by 0.4 percent compared to the 1.3 percent slump originally
reported for the previous month.
Excluding a steep drop in sales by motor vehicle and parts
dealers, retail sales jumped by an even stronger 1.3 percent in
June following a revised 0.9 percent decrease in May.
Economists had been expecting ex-auto sales to increase by 0.4
percent compared to the 0.7 percent drop originally reported for
the previous month.
In an interview with CNBC on Thursday, U.S. Treasury Secretary
Janet Yellen warned that a rapid rise in inflation could stall the
economic recovery, with elevated housing prices raising worries of
a bubble.
High inflation rate could continue for several more months, but
that is expected to fall back toward normal levels over the medium
term.
The greenback showed mixed performance against its major peers
in the Asian session. While it held steady against the euro, it
rose against the yen and the franc. Against the pound, it
weakened.
The greenback appreciated to an 8-day high of 0.9204 against the
franc from Thursday's trading close of 0.9177. The greenback is
likely to find resistance around the 0.94 level. The greenback
remained firm against the euro, at a 2-day high of 1.1792. The
EUR/USD pair had closed Thursday's deals at 1.1811. The greenback
is seen finding resistance around the 1.16 region.
Final data from Eurostat showed that Eurozone inflation fell
below 2 percent in June, as initially estimated.
Inflation eased to 1.9 percent in June from 2 percent in the
prior month. The annual rate came in line with the flash estimate
released on June 30.
Continuing its Asian session's advance, the dollar hit a 2-day
high of 110.34 against the yen. The pair was worth 109.81 when it
ended deals on Thursday. If the greenback rises further, 112 is
possibly seen as its next resistance level.
The Bank of Japan decided to maintain its monetary stimulus
unchanged and unveiled a preliminary outline for the new programme
to support efforts on climate change.
The bank also lowered its near-term growth outlook citing the
impact of the coronavirus pandemic and raised its fiscal 2021
inflation forecast.
The greenback held firm against the pound, with the pair trading
at 1.3820. The currency had logged a weekly high of 1.3792 at 3:30
am ET. The pound-greenback pair had finished yesterday's trading
session at 1.3821. On the upside, 1.345 is likely seen as its next
resistance level.
The greenback jumped to 0.7408 against the aussie, a level
unseen since December 2020. The aussie-greenback pair was worth
0.7418 at Thursday's close. The greenback is likely to find
resistance around the 0.72 level, should it rises further.
The greenback recovered from its Asian session's low of 0.7030
against the kiwi and was worth 0.6995. At yesterday's trading
close, the pair was quoted at 0.6977. The greenback is poised to
find resistance around the 0.68 level.
Data from Statistics New Zealand showed that New Zealand
inflation climbed 3.3 percent on year in the second quarter of 2021
- exceeding expectations for 2.8 percent and up sharply from 1.5
percent in the three months prior.
On a quarterly basis, inflation climbed a seasonally adjusted
1.3 percent - again beating forecasts for 0.8 percent, which would
have been unchanged from the first quarter.
The greenback wavered against the loonie and was trading at
1.2585. The greenback was trading at 1.2591 per loonie at
yesterday's close.
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