Dollar Recovering From Early Weakness

Dollar Recovering From Early Weakness

The dollar got off to a weak start Friday, but has since recovered lost ground and turned positive. Traders are reacting to the rather large batch of U.S. economic data that was released this morning.

Partly reflecting a drop in sales by motor vehicle and parts dealers, the Commerce Department released a report on Friday showing retail sales in the U.S. increased by much less than expected in the month of August.

The Commerce Department said retail sales inched up by 0.1 percent in August after climbing by an upwardly revised 0.7 percent in July. Economists had expected retail sales to rise by 0.4 percent compared to the 0.5 percent increase originally reported for the previous month.

Import prices in the U.S. fell by much more than expected in the month of August, according to a report released by the Labor Department on Friday.

The Labor Department said import prices dropped by 0.6 percent in August after edging down by a revised 0.1 percent in July.

Economists had expected import prices to dip by 0.2 percent compared to the unchanged reading originally reported for the previous month.

The report also said export prices slipped by 0.1 percent in August after falling by 0.5 percent in July. Export prices had been expected to come in unchanged.

A report released by the Federal Reserve on Friday showed U.S. industrial production rose by slightly more than expected in the month of August. The Fed said industrial production climbed by 0.4 percent in August, matching the upwardly revised increase in July.

Economists had expected production to rise by 0.3 percent compared to the 0.1 percent uptick originally reported for the previous month.

Business inventories in the U.S. increased in line with economist estimates in the month of July, the Commerce Department revealed in a report released on Friday. The Commerce Department said business inventories climbed by 0.6 percent in July after inching up by 0.1 percent in June.

Consumer sentiment in the U.S. has improved by much more than anticipated in the month of September, according to a report released by the University of Michigan on Friday. The report said the consumer sentiment index jumped to 100.8 in September from 96.2 in August. Economists had expected the index to inch up to 96.6.

The dollar slid to an early low of $1.1721 against the Euro Friday, but has since rebounded to around $1.1630.

The euro area trade surplus declined to the lowest level in four years in July, figures from Eurostat showed Friday. The trade surplus fell to a seasonally adjusted EUR 12.76 billion from EUR 16.47 billion in June. This was the lowest since June 2014, when the surplus totaled EUR 12.22 billion.

Eurozone's hourly labor cost increased at a slightly faster pace in the second quarter, data from Eurostat showed Friday. Hourly labor cost advanced 2.2 percent from previous year following a 2.1 percent rise in the first quarter.

The buck fell to a low of $1.3143 against the pound sterling Friday, but has since bounced back to around $1.3065.

The greenback has risen to around Y112.015 against the Japanese Yen this afternoon, from an early low of Y111.753.

Japan's industrial production declined more than estimated in July, final data from the Ministry of Economy, Trade and Industry showed Friday. Industrial output fell 0.2 percent on month in July instead of 0.1 percent drop estimated initially.

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