Dollar Slumps on Surprise Retail Sales Decline
The US dollar took a hit on Friday after an unexpected decline in retail sales was reported for July. According to official data, retail sales fell 0.6% last month, following a 0.2% increase in June.
Economists had expected a 0.1% rise in sales, but the actual numbers pointed to softer consumer activity in the world's largest economy. This has added to concerns about the strength of consumer demand and influenced expectations surrounding Federal Reserve monetary policy.
The weaker data reinforced concerns that economic momentum may be slowing. Market participants are also assessing recent inflation figures that came in softer than anticipated, which have reduced expectations of an immediate Federal Reserve rate move.
Traders are currently pricing a 31% probability of a rate hike at the September 15-16 meeting, compared with a 69% likelihood of an increase by December. The dollar index declined 0.25% to 99.67 as a result.