Two pieces of unexpectedly disappointing economic data sent the U.S. Dollar broadly lower as investors speculate that the economic news is likely to further delay an interest rate increase from the Federal Reserve Bank. Earlier today, the U.S. Census Bureau reported that retail sales fell in September to -0.3% (MoM), missing analysts’ expectations of a decline to -0.1% from 0.6% in August. Given that the U.S. economy is primarily consumer driven, that news, clearly indicating that Americans are holding tighter to their purse strings, sent the Dollar lower against both the common currency Euro and the Japanese Yen. Also disappointing investors was news that PPI, which measures inflation at the producer level, fell in September to 1.6% from August’s 1.8% (YoY), the first drop in PPI since mid-2013.
As reported at 3:43 p.m. (EST) in New York, the EUR/USD was trading higher at 1.2807, slipping from the earlier struck 3-week peak at $1.2887 which was a gain of more than 1%. The USD/JPY pair was lower at 106.1650 Yen, falling from the session high of 107.4900 Yen. The greenback was also lower versus the Swiss Franc, trading at 0.9420 Swiss Francs, recovering slightly from a session high of 0.9369 Swiss Francs.
Disinflation Concerns Surfacing
Several other factors are contributing to investors’ downbeat sentiment including a sharp decline in the price of oil and data which showed that consumer inflation was also falling in China and is now close to a 5-year low. Overall, concerns are growing that disinflation could be impacting the majority of the world’s largest economies.