Investing.com - The U.S. dollar extended losses against the yen on Monday, after data showed that U.S. retail sales fell for a third consecutive month in June, indicating that the economic recovery is losing momentum.
USD/JPY hit 78.83 during European afternoon trade, the pair’s lowest since June 20; the pair subsequently consolidated at 78.85, shedding 0.42%.
The pair was likely to find near-term support at 78.60, the low of June 15 and resistance at 79.27, the session high.
The Commerce Department said retail sales fell by a seasonally adjusted 0.5% in June, confounding expectations for a 0.2% increase, after a 0.2% drop in May.
It was the first time retail sales had dropped in three consecutive months since late 2008.
Core retail sales, which exclude automobile sales, declined for the second consecutive month, dropping 0.4%, against expectations for an increase of 0.1%, after falling by 0.4% in May.
The data fuelled speculation for another round of easing from the Federal Reserve, ahead of Fed Chairman Ben Bernanke's testimony on the economic outlook to the U.S. Senate on Tuesday and Wednesday.
In June, Bernanke said the U.S. central bank remained prepared to take additional steps to support economic growth if necessary, including additional asset purchases.
The greenback shrugged off a report showing that the New York Federal Reserve’s index of manufacturing conditions improved more-than-expected in July, as the employment index inched up.
The Federal Reserve Bank of New York said that its general business conditions index rose to 7.4 in July from 2.3 the previous month, outstripping expectations for a reading of 4.0
Demand for the yen was also supported by sustained concerns over the debt crisis in the euro zone.
Risk appetite was undermined by uncertainty over whether some bondholders could be forced to accept losses under the terms of Spain's bank bailout.
Elsewhere, Germany’s constitutional court announced that it will deliver a ruling on whether the euro zone’s permanent bailout fund contravenes the German constitution on September 12, disappointing hopes for an earlier decision.
The yen was trading close to a six-week high against the euro, with EUR/JPY down 0.59% to 96.40.
Later Monday, the International Monetary Fund was to publish forecasts for global economic growth.
USD/JPY hit 78.83 during European afternoon trade, the pair’s lowest since June 20; the pair subsequently consolidated at 78.85, shedding 0.42%.
The pair was likely to find near-term support at 78.60, the low of June 15 and resistance at 79.27, the session high.
The Commerce Department said retail sales fell by a seasonally adjusted 0.5% in June, confounding expectations for a 0.2% increase, after a 0.2% drop in May.
It was the first time retail sales had dropped in three consecutive months since late 2008.
Core retail sales, which exclude automobile sales, declined for the second consecutive month, dropping 0.4%, against expectations for an increase of 0.1%, after falling by 0.4% in May.
The data fuelled speculation for another round of easing from the Federal Reserve, ahead of Fed Chairman Ben Bernanke's testimony on the economic outlook to the U.S. Senate on Tuesday and Wednesday.
In June, Bernanke said the U.S. central bank remained prepared to take additional steps to support economic growth if necessary, including additional asset purchases.
The greenback shrugged off a report showing that the New York Federal Reserve’s index of manufacturing conditions improved more-than-expected in July, as the employment index inched up.
The Federal Reserve Bank of New York said that its general business conditions index rose to 7.4 in July from 2.3 the previous month, outstripping expectations for a reading of 4.0
Demand for the yen was also supported by sustained concerns over the debt crisis in the euro zone.
Risk appetite was undermined by uncertainty over whether some bondholders could be forced to accept losses under the terms of Spain's bank bailout.
Elsewhere, Germany’s constitutional court announced that it will deliver a ruling on whether the euro zone’s permanent bailout fund contravenes the German constitution on September 12, disappointing hopes for an earlier decision.
The yen was trading close to a six-week high against the euro, with EUR/JPY down 0.59% to 96.40.
Later Monday, the International Monetary Fund was to publish forecasts for global economic growth.