US dollar retreats as slew of data keeps rate cut expectations in June intact
By Gertrude Chavez-Dreyfuss
NEW YORK (Reuters) -The dollar fell for a second straight session on Thursday after a mixed, but overall solid batch of U.S. economic data, which is unlikely to stop the Federal Reserve from cutting interest rates by June, the first since the pandemic.
The U.S. dollar index was last down 0.4% at 104.28. Against the yen, the dollar slid 0.4% to 149.92.
Traders are once again watching dollar/yen as it topped 150 in the last few days, a critical level that puts the market on alert for possible intervention by Japan to weaken its currency.
The yen firmed despite Japan's unexpectedly weak gross domestic product figures, which saw the country lose its title as the world's third-largest economy to Germany.
In the United States, data showed retail sales, unadjusted for inflation, fell 0.8% in January, much lower than an expected decline of 0.1% based on a Reuters poll. The data was likely weighed down by winter storms.
Unadjusted retail sales in general fall in January. Economists had cautioned before the data release not to read too much into any sharp drop.
«The market remains focused on day-to-day data prints at this stage, but I don't think anything has really changed much,» said Brad Bechtel, global head of FX at Jefferies in New York.
«We did get pretty far into the market pricing in a no-landing scenario, pricing out rate cuts to further out in the year. That was unwound a little bit.»
Bechtel added that the dollar overall is consolidating the recent run-up after a relatively extended period of strength, over 5% on the year.
A separate report showed initial claims for state unemployment benefits fell 8,000 to a seasonally-adjusted 212,000 for the week ended Feb. 10. This is further evidence
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