The US dollar edged lower against major currencies on Friday after a report that US retail sales unexpectedly stalled last month and as fears of accelerating inflation receded.
The greenback was down 0.5 percent against a basket of currencies, last at 90.30, retracing most of the gains made earlier this week after data showed a surprise surge in consumer prices. The index is little changed from last week’s 90.23.
The US Department of Commerce on Friday said that retail sales were unchanged last month after recording a 10.7 percent surge in March, boosted by stimulus checks.
However, another acceleration in retail sales is likely in the coming months as the US economy reopens and Americans spend the savings they have been amassing.
“The US dollar pared more of its weekly gain Friday after disappointing news on America’s main growth engine, the consumer, added more evidence of an uneven recovery,” Western Union Business Solutions LLC senior market analyst Joe Manimbo wrote.
Friday’s drop erased some of a two-day rally in the US dollar after data on Wednesday showed that US consumer prices increased by the most in nearly 12 years.
While the US Federal Reserve has pledged to keep interest rates low even as inflation rises, some in the market have bet that the Fed would be forced to act sooner than expected. Higher interest rates strengthen the US dollar.
“Tepid data serves as a strong vote of confidence in the Fed’s low rate outlook, a dovish stance and a key vulnerability for the dollar,” Manimbo said.
In Taipei, the New Taiwan dollar fell against the US dollar, losing NT$0.016 to close at NT$28.012, down 0.4 percent for the week.
The euro was among the gainers against the US dollar on the day, up 0.46 percent at US$1.213.
The British pound rose 0.3 percent to US$1.4098, up more than 0.75 percent this week, on bets of a strong economic recovery in the UK and expectations that any Scottish independence referendum could be a ways off.
Bitcoin is down more than 13 percent this week after Tesla Inc chief executive Elon Musk said he would stop accepting the token as payment due to environmental concerns.
Additional reporting by CNA and Bloomberg, with staff writer
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