Dollar Tumbles to 10-Month Low as CPI, Retail Sales Fall Short

Bloomberg/Dennis Pettit & Alexandria Arnold/07-14-17

The dollar sank to a fresh 10-month low after closely watched gauges of U.S. inflation and retail sales missed estimates, casting a cloud over the outlook for monetary policy just days after testimony from Federal Reserve Chair Janet Yellen.

The U.S. currency declined versus its G-10 peers and was lower by almost 0.7 percent, its steepest drop since June as measured by the Bloomberg Dollar index. Amid broad greenback weakness, the Australian dollar rose to a 15-month high above 0.7800 and the pound reached its strongest in almost 10 months, approaching 1.3100.

…The odds of a Fed hike by year-end dropped to around 40% Friday, after Yellen testimony this week that the funds rate wouldn’t have to rise much to reach its neutral level. The FOMC meets July 25 and 26 and is expected to remain on hold after raising rates in June. Next week will also see the start of monthly housing data.

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