Weak US retail sales weigh on dollar

The dollar was broadly weaker as a result of soft U.S. economic data that came out on Thursday. Retail sales missed forecasts and initial jobless claims were higher last week. U.S. retail sales fell 0.8 percent last month, while jobless claims rose above 300,000 in the latest week.

The dollar index fell following two consecutive days of gains. The dollar fell over one percent against the yen to as low as 118.40.

However, the long term outlook for the greenback remains bullish, especially when so many central banks right now are cutting rates but the Federal Reserve is set to start hiking rates.

In late New York trading on Thursday, the dollar index was down 0.9 percent at 94.153 posting its largest one-day loss in more than a week.

The euro, meanwhile, rose to one-week highs versus the dollar and was back above the key $1.1400 level in early Friday trading.

The euro got a little bit of a boost after the European Central Bank further raised the cap on emergency funding for Greek banks by about 5 billion euros to 65 billion euros. However, the fate of Greece’s international bailout deal still remains uncertain and will keep the single currency vulnerable.

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