Thursday, 14 Jan 2010

The Dollar Weakens on Jobless Claims Data

The U.S dollar fell to almost a 3 week low against the Japanese yen after U.S. retail sales data showed an unexpected decline in December, signaling the economy may be slow in its recovery.

The greenback declined as U.S. retail sales and other data reinforced the view the U.S. Federal Reserve will keep its benchmark interest rate unchanged in the foreseeable future. U.S. retail sales decreased 0.3% in December, the Commerce Department reported today in Washington. Analysts said that Retail sales, coupled with last week's report showing an unexpected loss of 85,000 jobs in December, makes it more likely expectations will increase for the Federal Reserve to keep its target rate in a range of zero longer. Thus making higher-yielding currencies more attractive for investors and slowing the Dollar's momentum.