The U.S. dollar moved off from its early lows against its most major opponents in the European session on Friday, as U.S. retail sales climbed more than expected in August driven by a jump in auto sales.
Data from the Commerce Department showed that retail sales rose by 0.4 percent in August after climbing by an upwardly revised 0.8 percent in July.
Economists had expected retail sales to rise by 0.2 percent compared to the 0.7 percent increase originally reported for the previous month.
Excluding the jump in auto sales, retail sales came in unchanged in August after surging up by 1.0 percent in July. Ex-auto sales had been expected to inch up by 0.1 percent.
Data from the Labor Department showed a slightly bigger than expected decrease in U.S. import prices in the month of August.
The report showed import prices fell by 0.5 percent in August after inching up by a downwardly revised 0.1 percent in July. Economists had expected import prices to drop by 0.4 percent.
The currency declined against its major counterparts in the Asian session, excepting the yen. The fall was due to its safe-haven status, as trade tensions lessened after China’s Ministry of Commerce revealed plans to exempt U.S. agricultural products, including soybeans and pork, from additional tariffs.
China will add the agricultural products to a list of 16 types of American-made products granted tariff exemptions as a sign of goodwill ahead of the next round of trade talks.
The greenback recovered to 108.14 against the yen, from a low of 107.91 seen at 3:00 am ET. This may be compared to a 1-1/2-month peak of 108.26 it recorded in the Asian session. Next key resistance for the greenback is likely seen around the 111.00 level.
Final data from the Ministry of Economy, Trade and Industry showed that Japan’s industrial production expanded as estimated in July.
Industrial production rose 1.3 percent month-on-month in July, in line with the preliminary estimate.
Following a weekly decline to 0.9854 against the franc at 7:45 am ET, the greenback regained some traction and rose back to 0.9881. The greenback is likely to challenge resistance around the 1.00 region.
The greenback reversed from its early more than a 2-week low of 1.1109 against the euro, recovering to 1.1079 after the data. The greenback is poised to test resistance around the 1.09 mark.
Data from Eurostat showed that the euro area trade surplus increased in July on higher exports.
The trade surplus rose to a seasonally adjusted EUR 19 billion from EUR 17.7 billion in June.
The greenback appreciated to weekly highs of 0.6376 against the kiwi and 1.3243 against the loonie from yesterday’s closing values of 0.6405 and 1.3210, respectively. If the greenback strengthens further, it is likely to face resistance around 0.62 against the kiwi and 1.35 against the loonie
In contrast, the greenback held steady against the pound, following a fresh 7-week low of 1.2475 hit at 5:30 am ET. The pair had closed yesterday’s deals at 1.2329.
Although the greenback staged a modest recovery against the aussie after the data, it was short lived. The greenback was trading lower at 0.6878 against the aussie, compared to yesterday’s closing value of 0.6866. The next possible support for the greenback is seen around the 0.71 region.
The U.S. business inventories for July and University of Michigan’s consumer sentiment index for September are slated for release in the New York session.
The material has been provided by InstaForex Company – www.instaforex.com