Dollar slips vs. euro
The dollar slid against the euro and pound Friday as U.S. retail sales unexpectedly dropped in August and inflation at the wholesale level fell more sharply than expected.
The two reports could give the Federal Reserve more incentive to cut rather than raise U.S. interest rates.
The 15-nation euro jumped to $1.4215 in late trading in New York from $1.3951 late Thursday. The euro had fallen as low as $1.3881 on Thursday, its lowest point in nearly a year.
The British pound climbed to $1.7937 from $1.7528 late Thursday, but the dollar rose to ¥107.76 from ¥106.73.
On Friday, the Commerce Department saidretail sales in August fell by 0.3%, following the 0.5% decline in July. Economists had expected a 0.3% rise for August.
Meanwhile, the Labor Department said that wholesale inflation sank by 0.9% in August, nearly double what had been expected, as the price of oil and gasoline slid. In May, June and July, the prices producers pay had surged higher, reflecting the rise in energy costs.
Restrained inflation may lessen the need for the Federal Reserve to hike rates, and heightens the possibility of lowering interest rates again fast cash payday loan. The Fed cut rates seven times from September to June before signaling a pause as inflation rose.
Higher interest rates can curb inflation and boost a currency, making assets denominated in that currency more attractive to investors. Cutting rates can propel inflation and economic growth, but undercut a currency as investors transfer funds to higher-yielding assets.
"It’s a pretty big move lower," said Daniel Katzive, currency strategist at Credit Suisse Group in New York. "Mostly just profit-taking ahead of the weekend…but you could note that it is perhaps [moving on] more concern about financial conditions in the U.S."
Many financial stocks saw sharp drops as Lehman Brothers Holdings Inc. tried to find a buyer and find relief from losses caused by real estate-related debt.
In other New York trading, the dollar slipped to 1.1319 Swiss francs from 1.1393, and dropped to 1.0606 Canadian dollars from 1.0779.
Filed under: finance by Wolf