- POSTED: 14 Feb 2014 07:38
The dollar headed south against most major currencies after US retail sales unexpectedly fell in January; some economists lay blame partly on bad winter weather.
NEW YORK: The dollar headed south against most other major currencies on Thursday after US retail sales unexpectedly fell in January, but some economists blamed bad winter weather in part for the drop.
The euro advanced strongly, buying $1.3678 around 2200 GMT, up from $1.3593 late on Wednesday.
The dollar fell to 102.15 yen from 102.50 yen. The euro, however, rose slightly against the Japanese currency, trading at 139.74 yen compared with 139.33.
Retail sales fell 0.4 per cent in January and the prior two months' numbers were revised lower. The Commerce Department report raised questions about the strength of the US economy, heavily dependent on consumer spending for growth.
"Everyone is blaming the weakness in retail sales on the weather but there's no question that the slowdown in job growth in December and January also contributed to the contraction in demand," said Kathy Lien of BK Asset Management.
"If economists are blaming the pullback in spending on inclement weather, then we can also attribute the market's disappointment and the sell-off in the dollar to Mother Nature," she added.
The euro, meanwhile, was facing a test on Friday when the eurozone's gross domestic product numbers for the fourth quarter are released, Lien said.
"A good number would most likely drive EUR/USD above $1.37, especially after today's weaker US retail sales report," she said.
But a contraction in growth should "remind everyone that the European Central Bank is still considering easier monetary policy as the Federal Reserve begins to unwind its stimulus program."
The pound extended its Wednesday surge on the back of the Bank of England's improved economic outlook and revised guidance policy. Sterling fetched $1.6653, up from $1.6593.
The dollar fell to 0.8934 Swiss franc from 0.9004 franc.