Dollar Falls as Weak Retail Sales Data Reduces Rate Hike Expectations

The US dollar fell on Friday after data showed that retail sales unexpectedly declined in July. The unexpected drop of 0.6% followed an unrevised 0.2% gain in June, and was contrary to economists' forecasts of a 0.1% increase.

Juan Perez, director of trading at Monex USA, said: 'We are clearly having signs of poor consumption... This evidence is clearly showing that there is an economic slowdown in the United States.'

The weaker dollar helped send the euro to its highest level since June 17, rising 0.32% to $1.1564.

Traders are now pricing in just a 31% probability of a September rate hike by the Federal Reserve, alongside a 69% chance of a rate increase by December.