Thursday, 13 Aug 2009

The European Data Undercuts Greenback

The U.S. dollar remained under pressure against most major counterparts Thursday, undercut by disappointing U.S. July retail-sales figures, while data showed Euro-Zone economies unexpectedly returned to growth in the 2nd quarter. The U.S. has been expected to be the first major industrialized economy to emerge from recession, leading to speculation that it would also be the first to eventually adopt a more restrictive monetary policy that would be Dollar supportive. But the latest data damped those expectations, according to the European Union statistics report, on Thursday.

After the European data, the greenback took a hit vs. the EUR after news that U.S. retail sales unexpectedly fell 0.1% in July, despite a boost from the so-called cash-for-clunkers program. The U.S dollar also fell back against the Japanese currency to buy 95.24 yen, compared with 96.02 late on Wednesday. The Dollar remains sensitive to shifts in appetite for risk, traders said. The greenback sank as investors directed flows into equities, higher-yielding currencies and other assets