The negativity of the dollar continues

The dollar tumbled in recent days, but analysts weren't pointing to weaker-than-expected U.S. inflation data on Friday.

Richard Clarida, global strategic adviser at Pimco, the bond giant with around $1.6 trillion under management, told that disappointment over the progress of President Donald Trump's agenda was looming over the market.

To be sure, the dollar's tumble was both swift and hard on the heels of the disappointing data on Friday.

Flat consumer inflation and a surprise drop in June retail sales triggered new doubts that the Federal Reserve will be able to raise interest rates again this year.

The consumer price index, measuring what consumers pay for everything from apparel to used cars, was up 1.6 percent on-year in June, the fourth month of surprising weakness.

Retail sales fell 0.2 percent in June, down for a second month, raising concerns in markets about the strength of the economy. On Friday, Ian Lyngen, head of U.S. rates strategy at BMO, told that Fed funds futures were reflecting odds for another U.S. rate hike this year of just 46 percent, down from 52 percent before the data.

The dollar index, which measures the greenback against a basket of currencies, fell to as low as 95.088 on Friday, before slipping as low as 95.065 during Asia trade on Monday, marking the lowest levels since September — before the U.S. presidential election.

The greenback also touched multi-month lows against the euro, the British pound and the Australian dollar.

Source: Bloomberg

Trader I. Ivanov

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