Dollar Slides as Weak Retail Sales Raise Fears of Fed Rate Hike Delay

The US dollar fell against major currencies on Friday after data showed US retail sales unexpectedly declined in July, reinforcing bets that the Federal Reserve will hold off on raising interest rates at its September meeting.

Retail sales dropped 0.6 percent last month after an unrevised 0.2 percent gain in June, according to Commerce Department data released Friday. Economists polled by Reuters had forecast a 0.1 percent increase.

The dollar index fell 0.33 percent to 99.59. The euro climbed 0.36 percent to $1.1568, while the Japanese yen strengthened 0.32 percent to 158.97 per dollar.

Rate expectations have shifted, with traders pricing in just a 31 percent probability of a rate hike at the September 15-16 Federal Open Market Committee meeting, alongside a 64 percent chance of an increase by December, according to futures market data.