USD weaker on sales, producer price data

Story link: USD weaker on sales, producer price data

The US dollar weakened Friday as both retail sales and producer prices declined more than expected in August.

The Commerce Department reported that retail sales were 0.3 percent lower in August, while the Labor Department said that producer prices fell 0.9 percent during the month.

Additionally, the possibility that the Federal Reserve could cut US interest rates again before the year is out hurt the greenback, which traded at $1.42 to the euro in late morning trade in New York.

The euro was helped by comments from the finance minister of Luxembourg, who said he does not expect the Eurozone to suffer a prolonged recession, and from the vice president of the European Central Bank, who said there will not be a recession in the region at all.

The yen was also weaker as the possibility of a sale of Lehman Brothers (NYSE: LEH) encouraged investors to return to buying higher-yielding currencies.

At late morning trade in New York, the yen traded at ¥152.941 to the euro, at ¥107.7050 to the US dollar, at ¥193.018 to the pound, and at ¥16.047 to the Swedish krona.

Meanwhile, the return to carry trades helped the Australia and New Zealand dollars, while the Aussie was also helped by reduced expectations of an interest rate cut there next month after gains in employment.

The Australian dollar was worth 81.77 cents US and ¥88.0703, while it took 66.47 cents US to buy a New Zealand dollar and the kiwi was worth ¥71.56.