US dollar fades as retail sales stagnate and send sterling back above $1.30

 
Jake Cordell
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Shoppers took a pause in July as retail sales went nowhere
Shoppers took a pause in July as retail sales went nowhere (Source: Getty)

The US dollar has sunk after fresh economic data showed the recovery stumbled in July.


Retail sales flat-lined in the world's largest economy in July and factory prices defied expectations to fall into negative territory.

The pound climbed back above $1.30, up 0.5 per cent on the day, reversing some of the losses from earlier this week after the US Federal Reserve seemed on course to raise interest rates later this year. The data raises questions about the robustness of the US economy following unexpectedly strong employment figures released last week.

Retail sales were unchanged in the month of July compared to a 0.9 per cent uptick in June. Dennis de Jong at UFX.com said the figures were "neither particularly strong, not catastrophic ... showing that the world's largest economy is merely ticking along".


The producer prices index (PPI), a measure of how much factories and manufacturers pay for their goods, came in at minus 0.4 per cent on a monthly basis against expectations for growth of 0.1 per cent.

Peter Read, founder of mobile trading platform Pelican, said: "Yellen and co will know that today’s surprisingly poor data is a significant drop from last month’s figures. Further global market uncertainty, including equally poor Chinese data, may tempt the Fed to exercise caution."



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