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Dollar struggles in Asia after lift from US retail sales
[TOKYO] The dollar traded sideways in Asia on Friday after getting a lift from a solid US retail sales report that boosted expectations the Federal Reserve could raise rates as early as next month.
Most Asia-Pacific currencies continued their recovery from the worst two-day rout in almost 20 years after China reassured markets it would not let the yuan plunge, following a series of cuts.
In Tokyo, the greenback changed hands at 124.42 yen, nearly flat from 124.43 yen in US trading, while the euro ticked up to US$1.1155 from US$1.1152.
The 19-nation single currency was also little changed at 138.76 yen, against 138.77 yen in US trading.
On Thursday, fresh data showed US retail sales rose 0.6 per cent in July from June, a slightly bigger increase than the 0.5 per cent gain projected by analysts.
The Commerce Department also raised its figures for June sales to flat, from the prior estimate of a 0.3 per cent decline.
The Fed has said improving economic data will be key to determining when it raises rates for the first time in almost a decade, widely expected between September and December.
On Friday, China's central bank also reassured the markets by setting its rate against the dollar marginally higher than the previous day's close after three days of falls.
The move, coupled with comments from People's Bank of China officials, soothed nervous investors after a surprise devaluation of the yuan on Tuesday and two subsequent cuts roiled financial markets.
"Today's fixing is in line with what they promised to do, which is to take account (of) the previous day's close," Dennis Tan, a currency strategist at Barclays in Singapore, told Bloomberg News.
"It's quite clear from yesterday's PBoC press conference that it is not their main intention to depreciate the yuan sharply. They're OK with a modest depreciation but they don't want the depreciation to get out of hand."