Euro drops to two-week low against the dollar

Friday,   16-Aug-2019   02:05 PM (IST)

The euro fell to a two-week low on Friday against the dollar, which extended the gains it made the day before after U.S. retail sales data came out better than expected.  The dollar was on course to end the week up against the euro, the Japanese yen and the Swiss franc as investors returned to riskier assets. A stable offshore Chinese yuan helped improve risk appetite. The euro was down by 0.2% at $1.108875, the lowest it has been since Aug. 2. Measured against a basket of six major currencies .DXY, the dollar was higher in the early London trading at 98.210. It has recovered by about 1% from its three-week low on Aug. 9. Data showing U.S. consumers kept spending in July came as a relief after the U.S. Treasury yield curve inverted this week, which historically has preceded U.S. recessions. The inversion stoked worries about the impact of the Sino-U.S. trade war. The curve steepened a little on Friday. China on Thursday said it would retaliate for the latest U.S. tariffs on $300 billion of Chinese goods, but U.S. President Donald Trump said any pact would have to be on America’s terms, suggesting a resolution to the trade war remains elusive. China's offshore yuan, whose plunge past 7 to the dollar last week sent shivers through financial markets, was weaker on Friday at 7.0530. Sterling was up 0.3% at $1.2118, close to a one-week high of $1.2150 and on course for its first weekly gain since mid-July. Encouraging data on British retail sales and consumer prices suggested the British economy was in better shape than some investors had feared. Against the euro, the pound reached an 11-day high of 91.50 pence. However, the risk remains that Prime Minister Boris Johnson will take Britain out of the European Union without a transition agreement, causing short-term economic turmoil.