The greenback and yen rose on Tuesday as investors brought the two safe-haven currencies after disappointing U.S. retail sales data, which unexpectedly fell by 1.1 percent in March as soaring job losses forced consumers to pull back and mean the recession is likely to persist. The ICE futures U.S. dollar index added 0.16 percent to 84.752 in late New York afternoon session, after surging to as high as 85.059.
The dollar weakened against the yen as declining U.S. stocks after the surprising drop in retail sales data weighed. The Dow Jones industrial average tumbled 137 points or 1.71 percent to close at 7,920, while S&P’s 500 index and Nasdaq Composite index fell 2.01 percent to 841 and 1.67 percent to 1,625 respectively. The usd/jpy fell below 99.00 and touched a session low of 98.72, traded at 98.88 in late New York session.
The wariness pressured the euro and high-yielding currencies such as Australian and New Zealand dollars, dropping to session lows of 1.3226, 0.5836 and 0.7229 versus the U.S. dollar, and 130.90, 71.34 and 57.56 against the yen respectively.
Other economic reports from U.S. showed that prices paid to U.S. producers unexpectedly fell 1.2 percent in March after two months of gains, indicating the recession is keeping inflation under control.
On Wednesday, economic data releases include U.K. RICS house prices and DCLG house prices, Australia Westpac leading economic index, Japan capacity utilisation and industrial production, and U.S. CPI data, Midwest manufacturing, net long-term TIC flow, foreign treasury buys, industrial production, capacity utilisation and NAHB housing market index.