Dollar falls after US CPI, retail data disappoint

Dollar falls after US CPI, retail data disappoint

The Canadian dollar strengthened against its USA counterpart on Friday as oil extended its rally, while the gap between Canadian and US bond yields narrowed after weaker-than-expected US data.

Emerging markets-focused asset manager Ashmore ASHM.L fell after reporting a 5 percent rise in its fourth-quarter assets, boosted by new client cash.

Their implied view fell to 47 percent shortly after the release of the latest CPI and retail sales data.

The Aussie was 1.13 percent higher against the greenback at $0.7813.

US two-year yields slid as well, down at 1.343 percent, from 1.355 percent before the data's release.

Looking ahead, investors are awaiting a host of USA economic indicators, including core inflation, retail sales and industrial production for June later in the session for more insight into how the Fed might proceed.

The euro was up 0.37 percent against the greenback to $1.1437 and sterling was 1.07 percent higher at $1.3073, after hitting $1.3082, its highest since September 23, 2016.

Excluding auto sales, retail sales still dipped by 0.2% in June following the 0.3 decline seen in May.

More news: Wall Street bank shares off despite surprisingly strong profits

If low inflation persists, the Fed would have to stay its hand even longer, keeping interest rates near historic lows to encourage business and consumer spending and, in turn, price increases - a sign that economic activity is on a healthy growth cycle. As has become the norm of recent, a relatively hawkish Federal Reserve was unable to inspire any lasting strength in the currency while US data continued to disappoint.

The kiwi was battered early in the week by disappointing domestic data but gained sharply toward the end of the week amid speculation the Reserve Bank may be more inclined to hike interest rates in the face of increases and bullish talk from other central banks including the Bank of Canada.

The Fed is projecting one more interest rate hike for this year, which economists expecting it to come in December.

Dow Jones closed up by 0.41 percent, S&P 500 ended up 0.47 percent, Nasdaq finished the day up by 0.59 percent. The two-year note fell to 1.347% from 1.363% at yesterday's close, and the 30-year fell to 2.892%. The 10-year German Bund ticked up nearly one basis point to yield 0.525 per cent.

Gold prices jumped 1.4 percent to the highest level in almost two weeks on Friday after data pointed to weak US inflation, reaffirming doubts that the USA central bank would again hike interest rates this year. It was poised for a weekly gain of 1.3 percent, the biggest since mid-May.

A supply interruption in Nigeria boosted crude oil and prices posted a weekly gain of more than 4 percent on lower USA stockpiles.

OIL: Benchmark U.S. crude gained 7 cents to $46.15 per barrel in electronic trading on New York Mercantile Exchange.

Drugmaker AstraZeneca AZN.L continued Thursday's slide, down 1.6 percent due to uncertainty around reports that CEO Pascal Soriot was preparing to leave the company.

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