US retail sales unexpectedly fall 0.6% in July, dollar index drops to 99.59

Published Aug 14, 01:58 PM UTC

The US dollar fell on Friday after data showed US retail sales unexpectedly declined 0.6% in July, defying economists' expectations of a 0.1% gain. The weak consumption data added to signs of an economic slowdown in the United States, following softer-than-expected inflation data and a surprise drop in July payrolls. Traders now see only a 31% probability of a Federal Reserve rate hike in September, down from earlier expectations. The dollar index fell 0.33% to 99.59, while the euro rose 0.36% to $1.1568. The Japanese yen strengthened 0.32% to 158.97 per dollar, though it remained on track for a weekly decline. The Bank of Japan is reportedly set to raise rates as soon as September and may consider more aggressive hikes to support the yen, which had fallen to 40-year lows near 164 per dollar before July's intervention.