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The Dollar Dropped For The Second Consecutive Session

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The Dollar Dropped For The Second Consecutive Session

(CTN News) – On Thursday, the dollar fell after mixed data showed the US economy remained on solid ground, though the Federal Reserve is likely to start cutting rates by June.

A 0.3% drop in the dollar index occurred last night. As a result, the dollar dropped by 0.5% to 149.87 yen.

With the dollar/yen near 150 in the last couple of days, traders are watching Japan’s intervention to weaken its currency again.

In spite of the unexpected weakness of Japan’s GDP numbers, the yen firmed despite falling behind Germany in the position of world’s third largest economy.

A Reuters poll forecast a decline in retail sales of 0.1% in January, but actual retail sales dropped only 0.8%, unadjusted for inflation. The data was likely affected by winter storms.

According to the January retail sales report, sales fell unadjusted by 0.9% in general. An economist advised against reading too much into any sharp decline before the data were released.

When bad weather occurs, retail sales and housing starts typically fall, and those numbers are likely to be weak when January’s report is released tomorrow, says Bill Adams of Comerica Bank.

It usually reverses quickly as the weather returns to normal and people catch up on spending plans that were delayed by the cold and snow. He believes the Fed is most likely to ignore one month’s weak retail sales figures, because there is a clear explanation for what appears to be a temporary issue.

The number of individuals filing for state unemployment benefits dropped by 8,000 to 212,000 in the week ending Feb. 10. Labor markets continue to be tight in the United States.

An additional report found that industrial production fell -0.1% in January, worse than expected. Compared to October, it is the lowest since then.

After sinking -29.2 points to -43.7 in January, the Empire State manufacturing index improved to -2.4 in February, a rise of 41.3 points.

In February, the Philadelphia Fed manufacturing index rose 15.8 points to 5.2 from -10.6 in January, well above expectations. Compared with August’s 7.7, February’s print was the highest since then.

The dollar fell despite those decent US numbers. To 0.8787 Swiss francs, the greenback declined by 0.8%.

There was a 0.5% gain for the euro to $1.0782, while sterling gained 0.2% to $1.2590.

It is likely that the dollar’s pullback is temporary, according to Thierry Albert Wizman, global rates and FX strategist at Macquarie in New York.

“So long as US outperformance continues, it seems unlikely the dollar’s momentum will reverse anytime soon,” he said.


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Alishba Waris is an independent journalist working for CTN News. She brings a wealth of experience and a keen eye for detail to her reporting. With a knack for uncovering the truth, Waris isn't afraid to ask tough questions and hold those in power accountable. Her writing is clear, concise, and cuts through the noise, delivering the facts readers need to stay informed. Waris's dedication to ethical journalism shines through in her hard-hitting yet fair coverage of important issues.

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