The release yesterday of unexpectedly improved U.S. retail sales figures helped to push the U.S. Dollar higher during the Asian trading session, suggesting that the economic growth which had faltered might indeed have been the result of an extremely harsh winter season. According to the U.S. Census Bureau, retail sales jumped by 1.1% in March, against consensus estimates of 0.8%, the largest gain in nearly 18 months; moreover, February’s figures were upwardly revised to 0.7% from 0.3%. Also helping to provide a boost to higher risk currencies was an equities rally on Wall Street on the heels of Citicorp’s upbeat financial earnings.
As reported at 11:07 a.m. (JST) in Tokyo, the U.S. Dollar Index was trading at 79.776 .DXY, a gain of 0.1%. The USD/JPY pair was trading higher at 101.93 Yen, edging away from last week’s 3½ week trough struck on Friday at 101.32 Yen. Meanwhile the EUR/USD pair skidded lower to $1.3815, off last Friday’s high of $1.3906; the EUR/JPY edged higher to 140.81 Yen.
Appeal Waning for Safe Havens
FX strategists point out that the upbeat data releases were sufficiently positive to move investors out of the Japanese Yen and other safe haven currencies, though the uptick particularly in the EUR/JPY pair was more a factor of a general waning of safe haven appeal than the Euro’s attractiveness. The Euro continues to be under pressure both from geopolitics as much as recently issued comments suggesting future easing made by members of the ECB’s monetary policy committee.