US dollar hurt by retail sales report, bank results

US dollar hurt by retail sales report, bank results

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The US dollar weakened in relation to the yen, the Swiss franc and the pound on Tuesday on reports that retail sales fell in December and that Citigroup (NYSE: C) lost $9.83 billion in the fourth quarter of 2007.

Not helping matters was a statement from former Federal Reserve chairman Alan Greenspan in a published interview to the effect that if the US economy is not already in a recession, it will be soon.

Mr. Greenspan has been warning about a possible recession in the US since at least February 2007.

The greenback was at its lowest level versus the yen since 2005 as it dropped to ¥106.85 to the dollar in morning trade in New York, but by just past 1 p.m. it had retreated to ¥107.1500, still better than Monday’s ¥108.16.

At the same time, the yen traded at ¥159.1016 to the euro and at ¥210.7916 to the pound, and was up against all major currencies.

The dollar touched a new all-time low versus the Swiss franc when the franc traded at SFr1.0856 to the dollar; in early afternoon trade in New York it traded at SFr1.0914 to the US currency.

The pound had its biggest one-day gain in relation to the US dollar in a month and strengthened versus the euro as UK inflation was above the 2 percent target set by the Bank of England again.

In late afternoon trade in London, it took $1.9684 to buy a pound, while by early afternoon in New York the dollar traded at $1.9673 to the pound.

In addition, the pound traded at 75.48p to the euro in New York after trading at 75.37p to the shared currency earlier.