US CPI and retail sales data miss knock the dollar down

Dollar Tumbles to Lowest Since September After Yellen's Comments

The US dollar is tumbling down.

Emerging markets-focused asset manager Ashmore ASHM.L fell after reporting a 5 percent rise in its fourth-quarter assets, boosted by new client cash.

Money markets pricing suggests less than a 50 percent chance of a hike over the next year, according to CME's FedWatch tool. The Russell 2000 index of smaller-company stocks inched up 0.1 percent to 1,425.66.

The benchmark 10-year US Treasury note rose 6/32 in price to yield 2.3248 per cent.

USA consumer price inflation fell more sharply than expected, to 1.6% in June from 1.9% in May.

Indeed a cursory look at the EUR/USD chart, which has extended its uptrend into the 1.14s recently, supports a continuation higher, which would be commensurate with a weaker Dollar profile. Headline retail sales growth declined for the second time this year, falling by 0.2%, negatively compared to the anticipated 0.1% expansion and below the upwardly revised - 0.1% from May (from -0.3% before).

Ahead of Fed Chair Yellen's testimony to Congress on the state of the US economy from 1400 GMT, two of her colleagues cited low wage growth and muted inflation as reasons for caution on further interest rate increases.

"I would like to see some greater evidence that we are making progress toward meeting our 2% inflation objective in the medium term", he said in an essay published on Thursday.

European shares had their strongest week in more than two months as investors piled back into equities on signs that the world's major central banks would likely not tighten monetary policy as quickly as some had feared.




After keeping its key policy rate at a record low near zero for seven years, the central bank began raising rates gradually with one quarter-point hike in December 2015, another one last December and two more in March and June of this year.

The Dow Jones Industrial Average .DJI rose 84.65 points, or 0.39 percent, to 21,637.74.

US 10-year yield fell to 2.303 percent, from 2.348 percent late on Thursday. Retail sales rose 2.8 per cent year-on-year in June. The German 10-year yield fell as much as 4 basis points to 0.49 per cent, before paring declines to about 0.53 per cent at the end of day.

The CPI, in particular, will garner interest because "if you take Yellen at her word the Fed is starting to second guess itself as to whether recent weakness is transitory", said ANZ Bank New Zealand senior economist Phil Borkin.

Spot gold gained 0.96 pct at $1,228.61 per ounce by 3:01 p.m. EDT (1901 GMT) after hitting $1,232.76.

The most-active USA gold futures for August delivery futures settled up $10.20, or 0.84 percent, at $1,227.50 per ounce.

For the week, silver is on track for a gain of around 1.5%. Oil prices rose 1 per cent.

Brent crude futures, the worldwide benchmark for oil, were up 31 cents at $48.73 per barrel.

Brent crude futures, the global benchmark for oil, settled up 49 cents at US$48.91 per barrel.

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