FALCON POWERS – The U.S. dollar trimmed its gains against the euro on Tuesday after disappointing U.S. retail sales, which bolstered the Federal Reserve’s case for cutting interest rates later this year.
U.S. retail sales rose less than expected in May, as declines in gasoline and automobile sales weighed on receipts at service stations and auto dealers.
The slowdown in sales growth reflects how higher prices and interest rates are forcing households to prioritize necessities and cut discretionary spending. The euro fell 0.07% to $1.0727, after earlier dropping to $1.071.
The dollar index, which measures the currency against a basket of six major peers, rose 0.1% to 105.40 during Asian trading.
The gain in the dollar index was largely driven by heavy euro selling, after French President Emmanuel Macron unexpectedly called for early legislative elections last week in response to his centrist party’s defeat by Marine Le Pen’s National Rally in the European Parliament elections. The euro has since stabilized.
The dollar was little changed against the Japanese yen, holding at 157.81 yen on Tuesday, still below the six-week high of 158.26 yen hit on Friday.
The British pound fell 0.06% to $1.2697 as investors await inflation data on Wednesday and the Bank of England’s rate decision the following day.
The Australian dollar rose 0.3% after the Reserve Bank of Australia left interest rates unchanged on Tuesday.
In the crypto market, bitcoin fell around 2% to $64,906, its lowest level in a month.
