Reuters: US Dollar Report: FOREX-Dollar rises broadly on anticipation of strong U.S. data

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FOREX-Dollar rises broadly on anticipation of strong U.S. data Aug 12th 2013, 12:41 Tweet Share this Email Print Mon Aug 12, 2013 8:41am EDT * Retail sales, other U.S. data this week could support dollar * Drops then recovers against yen after disappointing Japanese growth data NEW YORK, Aug 12 (Reuters) - The dollar rallied on Monday amid the ongoing debate on the Federal Reserve's plans for scaling back monetary stimulus with expectations rising that strong U.S. data will prompt the Fed to act sooner rather than later. Market players said the near-term outlook for the dollar would hinge on U.S. data due this week, such as Tuesday's retail sales reading which most expect to be strong. The dollar index, which measures the dollar against a basket of six currencies, rose 0.3 percent to 81.408, moving away from a seven-week low touched last week. The dollar initially weakened against the yen following disappointing Japanese growth data that prompted investors to trim their exposure to risk but then rose as investors bought on the dips. "Trading could continue at its soporific pace until tomorrow's U.S. retail sales report which offer traders a better look at consumer spending at the start of Q3," said Boris Schlossberg, managing director of foreign exchange at BK Asset Management in New York. "If the data shows further weakening, the greenback could quickly give up today's gains as markets begin to doubt the September taper by the Fed." The dollar slipped against the yen earlier on Monday after data showed Japan's economy grew an annualised 2.6 percent in the period from April to June, a third straight quarter of expansion but slower than expected. The dollar bounced back after running into bids near 96.00 yen as buyers emerged at lower levels. The U.S. currency was last up 0.4 percent at 96.72 yen, also pulling away from a seven-week low set last Thursday. An option expiry was reported at 96.00 yen. Analysts added the yen, which usually attracts buyers in times of markets stress, could gain if Japanese stocks continue to fall on poor economic data. But some strategists warned this could weigh on the yen if it persuaded the country's central bank to loosen policy. "If data is disappointing in Japan then there is more room for policy response by the BOJ and that would be yen negative," said Chris Walker, FX strategist at Barclays Capital in London adding they forecast the dollar at 98 yen in one month. The euro was down 0.2 percent to $1.3308. Support was cited around $1.3269, the 61.8 percent Fibonacci retracement of the July 2-8 uptrend. The single currency was under pressure after German news magazine Der Spiegel reported on Sunday the Bundesbank was warning Greece would need more financial assistance by early next year. Data on Monday showed the Greek economy, which was facing its sixth consecutive year of recession in 2013, had shrunk at 4.6 percent in the second quarter. Tweet this Link this Share this Digg this Email Reprints Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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