The US dollar strengthened vs. most major currencies as weak retail sales data and a fall in equities helped increase risk aversion. The Commerce Department reported that total retail sales fell 0.4% in April after falling by a revised 1.3% in March. The Mortgage Bankers Association said its mortgage application index that includes purchase and refinance loans fell 8.6% last week.
The euro fell against the dollar with weak economic data helping investors become more risk averse. French inflation hit a record low as consumer prices rose by 0.1% month-on-month and year-on year in April. The Bank of France said France 's current account deficit widened to -2.2 billion euros in March from 2.0 billion euros in February. Germany approved a plan to relieve banks of toxic assets, aiming to boost confidence in the sector and encourage lending. The German Finance Minister Peer Steinbrueck said the plan targeted just under 200 billion euros worth of toxic assets, with shareholders in affected banks shouldering risks tied to those assets. Euro-zone industrial production fell 2.0% month-on-month and 20.2% year-on-year, which is damaging to the Euro-zone economy as it accounts for roughly 17% of the Euro-zone's GDP.
Sterling weakened against the dollar after weak US retail data reduced optimism that the global economy is on the road to recovery. The Bank of England said that it forecasts the economy shrinking at an annual rate of around 4.5% in the second quarter of 2009 before recovering at the start of 2010.
The Japanese yen strengthened against the dollar as investors fled to the safe-haven currency after weak US retail sales data.
The Canadian dollar fell against the dollar as crude oil prices, a key Canadian export, fell after hitting $60 a barrel yesterday.
The Australian dollar and New Zealand dollar both fell against the dollar as risk aversion kept investors from buying the high-yielding currencies.
The Mexican peso weakened against the dollar after weak US retail sales data dampened hopes of a quick economic recovery in the US , Mexico 's top trading partner.
10-Year Treasury Note Yield : 3.134%
Dow Jones Industrial Average : 8,339.61 -129.50