Dollar falls after US retail report disappoints

[NEW YORK] The dollar weakened against other major currencies Tuesday after a US March retail sales report missed expectations, showing cautious consumer spending in the leading economy.

The euro bought US$1.0654 around 2100 GMT, up from US$1.0571 at the same time Monday.

US retail sales rebounded from a three-month slump in March, but the 0.9 percent gain was slightly weaker than estimated. Excluding auto sales, retail sales rose only 0.4 per cent instead of the 0.7 per cent increase expected.

"For the first time in six trading days, we saw broad-based weakness in the US dollar," said Kathy Lien of BK Asset Management.

"Investors needed a reason to take profits on their long dollar trades and this morning's softer retail sales report provided the perfect excuse."

With US data weaker, the euro gained support from a Eurostat report showing eurozone industrial production rebounded a solid 1.1 per cent in February after falling in January.

"The European Central Bank's quantitative easing program and a weak euro are paying dividends," said Ryan Sweet of Moody's Analytics.

Launched on March 9, the ECB's massive bond-purchase programme is aimed at lowering borrowing costs and, in turn, boosting the tepid eurozone economy.

The encouraging eurozone report came ahead of the ECB's monetary policy meeting Wednesday.

AFP