WASHINGTON: The dollar index was lower after data showed US retail sales increased more than expected in July, while the yuan sank to a nine-month trough on Tuesday after China’s central bank unexpectedly cut key policy rates.
US retail sales jumped 0.7% last month, the Commerce Department said, demonstrating that demand has remained resilient despite the Federal Reserve’s aggressive interest rate hikes to tame inflation, thanks to strong wage gains from a tight labor market.
The dollar index, which measures the currency against six peers including the euro and sterling, dropped 0.194% to 102.920 after hitting a 1-1/2-month high at 103.46 on Monday.
The dollar gained over 0.5% against the offshore yuan to a nine-month high of 7.3307 as the People’s Bank of China (PBOC) cut its rates in an effort to boost a sputtering economic recovery.
Against the yen, the US dollar pushed to a fresh nine-month high of 145.865, before dropping to a session low at 145.25. It was last trading at 145.28 per yen.
Traders are looking for any hints of intervention, after the dollar’s surge above 145 last autumn triggered the first yen buying by Japanese officials in a generation.
The pound was last 0.38% higher at $1.27335 following data showing British wages excluding bonuses were 7.8% higher than a year earlier in the three months to June. That represented the highest annual growth rate since comparable records began in 2001.
The euro was last up 0.28% to $1.0935.
The Russian rouble gave up early gains after Russia’s central bank lifted its key interest rate by 350 basis points to 12% at an emergency meeting to try and halt the currency from weakening past 100 to the dollar after a public call from the Kremlin for tighter monetary policy.
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