USD on weekly basis ended lower due to disappointing U.S. retail sales and jobless claims data. The USD Index (DXY), which tracks the movement of the USD against six currencies, fell by 0.52% in the last week and on yearly basis the index is up by 17.55%.
U.S. Commerce Department in a report stated that retail sales in the month of January declined by 0.8% against the expectations of 0.5% decline. In December retail sales declined by 0.9%. Core retail sales, which excludes automobile sales, declined by 0.9% in the month of December against expectations of 0.4% decline. In November core retail sales declined by 0.9%.
US Jobless claims for the week ending 7th February rose by 25,000 to 304,000 from the previous week’s revised total of 279,000, against expectations of rise by 6,000 to 285,000.
University of Michigan report showed that U.S. consumer sentiment index declined to 93.6 this month from 98.1 in January against the expectation of flat reading.
However, despite posting weak data, USD remained largely supported due to surging demand for the safe-haven currency because of ongoing concern over the Greek debt crisis.
Euro appreciated on weekly basis against USD by 0.69%. Euro remained flat in the early part of the week but on Wednesday it rose by 0.59% against USD as the talk between Greece and European Union officials ended without an agreement, even though both sides remained hopeful to arrive at a consensus. Further talks are due to be held this week.
Greece’s current bailout is due to expire on 28th February and the current Greek government does not want to extend the bailout, fuelling fears over a conflict with its creditors, which could trigger the country’s exit from the euro zone.
Brazilian Real dropped to its lowest level in a decade as it extended its decline against the USD by 1.86%. On yearly basis Real has depreciated by 15.56% against USD. In the recent past Brazilian Real has come under tremendous pressure due to Petrobras scandal, which is the nation’s biggest-ever corruption case. Real also came under pressure due to weak monthly retail sales data. Retail sales, excluding automobiles and building materials, declined by 2.6% from November, the decline was the steepest ever monthly decline since the start of the data series.
Russian Ruble appreciated by 5.38% against the USD for the second consecutive week due to rising oil prices ( Crude Oil (Brent) rose to one and half month high level of 61.52 USD/bbl) and Minsk talks. On Thursday Minsk talks reached an agreement on a Ukraine ceasefire but the reaction of the Ruble was relatively muted due to doubt over how soon Western sanctions against Russia will be lifted off.
Asian currencies were majorly down on weekly basis against the USD. Australian Dollar declined by 0.44%, South Korean Won declined by 0.65%, Philippines Peso declined by 0.24%, Indonesia Rupiah declined by 1.38%, Indian Rupee declined by 0.79% whereas Japanese Yen rose 0.31%, Chinese Yuan rose by 0.07% and Thai Baht rose by 0.13%.
Australian Dollar in the early part of the week remained largely flat but declined on Thursday due to weak employment data. Australian Bureau of Statistics in its report showed that number of employed people declined by 12,200 in January against the expectation of 5,000 decline. But in December there was increase of 42,400 as per revised figures. Later on Friday Australian Dollar recovered after Reserve Bank of Australia governor indicated that spurring demand in the economy would take more work, indirectly suggesting the government to step-up spending.