The dollar weakened to its lowest level in 3 months against its peers today following the release of US retail sales data which did not exceed forecasts, renewing doubt surrounding the state of US economic recovery.  The Commerce Department reported that retail sales figures were flat between March and April compounding forecasts for a rise of 0.2%.  Core retail sales also disappointed as the market expected a 0.5% increase while there was only a 0.1% gain.  The data supported predictions that the Federal Reserve will wait until later this year to raise rates.  

The euro strengthened against the dollar with the pair surging to 1 week highs over 1% hitting a session high of 1.1382.  Data released out of the euro zone revealed that in the first quarter its economy expanded by a rate of 0.4% setting a 4 year high which was just below forecasts of 0.5%.  French GDP widened by 0.6% marking a 2 year high while German GDP highlighted growth of 0.3% coming off a rate of 0.7% in the last quarter of 2014.

The pound strengthened against the dollar with the pair trading near 5 month highs hitting a session high of 1.5768.  The Bank of England lowered its growth outlook for 2015 from 2.9% to 2.4%.  The BOE also indicated that its inflation target of 2% should be met in 2 years.  The UK Office for National Statistics reported that the UK unemployment rate inched down from 5.6% in March to 5.5% in April which is its lowest level in nearly 7 years.  Data also revealed that UK jobless claims decreased by 12,600 in April while experts forecast a decrease of 20,000.

The yen strengthened against the dollar with the pair trading in its usual tight range today just shy of 1 big figure.  Today’s US data did nothing to strengthen the dollar and since the Bank of Japan does not seem to be in a hurry to expand its stimulus program yen weakness is also at a standstill.  As a result the pair is still bound to its current range with no near term breakout of its wider range of 118 to 121 in sight.    

The Australian, New Zealand and Canadian dollars were widely stronger against the greenback.  The Aussie dollar was trading well over 3 month highs with a session high of 0.8123 while the kiwi dollar surged over 1.5% with a session high of 0.7505.  Australia’s wage price index was up 0.5% in the first quarter below forecasts for a 0.6% increase.  The kiwi dollar gained lost ground following an announcement from the Reserve Bank of New Zealand which indicated that its currency’s strength was “unjustified and unsustainable”.  The loonie advanced to 4 month highs against the greenback with the pair hitting a session low of 1.1928.  

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