The US dollar rose against the euro for the first time in four days as an unexpected drop in US retail sales increased concern the global economic recovery may not be sustainable, boosting the currency’s appeal as a haven.
The greenback gained against most major currencies even as other data showed US consumer confidence rose to its highest level since 2008. The pound weakened against all of its major peers after UK manufacturing unexpectedly declined. Australia’s dollar dropped versus its US counterpart as inflation in China fanned concern the nation may move to cool its economy.
“The market is very vulnerable to bad news,” said Vassili Serebriakov, a currency strategist at Wells Fargo & Co in New York. “The main bad news came from the US in the form of the retail sales report. Chinese data was strong, and that’s prompted fears of further policy tightening. That data mix on Friday was negative for risk appetite.”
The US dollar gained as much as 0.7 percent to US$1.2045 per euro before trading at US$1.2113 at 4:33pm in New York, up 0.1 percent from US$1.2124 on Thursday. It dropped 1.1 percent for the week. The greenback gained 0.4 percent to ¥91.72, from ¥91.34. The euro rose 0.2 percent to ¥110.97, compared with ¥110.72, and gained 0.9 percent for the week.
The euro has dropped 9.6 percent this year for the worst performance among its developed-world counterparts, according to Bloomberg Currency Correlation-Weighted Indices. The US dollar has strengthened 9.1 percent.
Sterling pared its first weekly gain in more than a month against the US dollar as UK factory output fell 0.4 percent in April from March, the Office for National Statistics said on Friday in London. Economists estimated it would increase 0.5 percent, according to a Bloomberg survey.
The pound tumbled 1.1 percent versus the dollar to US$1.4551, leaving its increase for the week at 0.7 percent. It lost 0.9 percent on Friday and 0.5 percent this week to 83.17 pence per euro.
Asian currencies gained on Friday, paring the week’s decline, as the strength of economic data raised optimism the region will lead a global recovery, boosting demand for local assets.
Yuan forwards climbed to a two-week high as reports showing a surge in China’s exports and the fastest inflation rate in 19 months helped revitalized bets for an end to the currency’s peg to the US dollar.
The yuan’s 12-month non-deliverable forwards touched 6.7335 per dollar on Friday, the strongest level since May 28.
Indonesia’s rupiah led gains on Friday, rising 0.4 percent to 9,200 per dollar in Jakarta, according to data compiled by Bloomberg, erasing losses incurred this week. The ringgit advanced 0.4 percent to 3.2845, and was little changed from a week ago. The Thai baht appreciated for a fourth day, capping a 0.4 percent weekly gain to 32.49.
South Korea’s won slumped 3.6 percent to 1,246.10 from a week ago, as government officials suggested measures to stem capital flows to reduce volatility in its currency.
The New Taiwan dollar gained for a second day on Friday on speculation overseas funds will increase purchases of Taiwanese assets improving economic numbers. The currency advanced 0.2 percent to NT$32.439, paring the loss for the week to 0.3 percent, according to Taipei Forex Inc.
Elsewhere, the Singapore dollar added 0.4 percent to S$1.4049 against the greenback and was down 0.1 percent from a week ago. The Indian rupee gained 0.2 percent to 46.87 and was little changed from June 4. The Philippine peso climbed 0.2 percent to 46.625, and fell 0.7 percent this week.
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