The dollar has extended its losses from Friday at the beginning of the new trading week. While the U.S. reported business inventories in line with expectations and a stronger than anticipated NY manufacturing result, the unexpected decline in June retail sales has weighed on investors.
U.S. retail sales showed an unexpected drop in the month of June, according to figures released Monday by the Commerce Department. Advance estimates for U.S. retail sales for June came in at a seasonally adjusted level of $401.5 billion, a 0.5 percent drop from May levels. The drop came after sales fell 0.2 percent in May. Most economists had expected retail sales to rebound in June rather than continuing to contract, with the consensus forecast calling for 0.2 percent growth.
The International Monetary Fund slashed its growth forecast for the world economy on Monday, citing increasing signs of weakness in the global recovery due to the ongoing European debt crisis and a slowdown in emerging economies.
In an update to its twice-yearly World Economic Outlook, the lender trimmed the growth forecast for 2013 to 3.9 percent from the 4.1 percent predicted in April. The projection for this year was left largely unchanged at 3.5 percent.
Italy plans to dispose public assets between EUR 15 billion and EUR 20 billion each year in order to reduce its public debt by 20 percent in five years, Finance Minister Vittorio Grilli said in a newspaper interview. The sale of assets worth 1 percent of gross domestic product with an annual 1 percent economic growth would help to cut the public debt as planned, he told Corriere della Sera.
The greenback rose to $1.2174 versus the Euro Monday morning, but has since fallen back to around $1.2260.
Eurozone trade surplus surged notably in May on rising exports and weak imports to exceed expectations, a report from Eurostat showed Monday. Due to an increase in exports and the continuing fall in imports, the trade surplus grew to EUR 6.9 billion from EUR 3.7 billion in April. Economists had expected the surplus to rise to EUR 4 billion.
Inflation in Eurozone was 2.4 percent in June, unchanged from the previous month, the latest report from Eurostat showed Monday. The figure matched the preliminary estimate.
Employment in German manufacturing sector increased in May, data from the Federal Statistical Office showed Monday. The number of workers in the sector rose 2.8 percent year-on-year to 5.2 million in May.
The British economy would likely return to growth in the next six months, buoyed by falling inflation and higher consumer spending, a report from Ernst & Young ITEM Club showed Monday. The economy would see an “Indian summer” this year, the report said. ITEM Club said inflation should hit 1.7 percent by the end of the year, giving consumers extra cash in their pockets to spend on the high street.
The dollar initially rose to $1.5516 versus the pound sterling Monday morning, but has since dropped to $1.5643, its lowest level since July 3rd.
The buck has extended Friday’s losses versus the Japanese Yen on Monday, reaching a one-month low of Y78.693.
Manufacturing activity in New York has expanded modestly in the month of July, according to a report released by the Federal Reserve Bank of New York on Monday, with the index of activity in the manufacturing sector rising by more than anticipated.
The New York Fed said its general business conditions index rose to 7.4 in July from 2.3 in June, with a positive reading indicating growth in the manufacturing sector. Economists had expected the index to show a more modest increase to a reading of 4.5.
U.S. business inventories saw a moderate increase in May, matching revised growth figures for April that were slightly lower than initially reported. The Commerce Department released a report Monday showing the total level of manufacturers and trade inventories at $1.5784 trillion in May, a 0.3 percent increase from April levels. The May increase was in line with the expectations of most economists.