Dollar rebounds after sinking on weak US data

The dollar picked up on Monday after taking a hit from weak US data last week that had fuelled speculation the Federal Reserve's rate hike would be delayed. 

PHOTO: AFP

MAY 18, 201511:19 AM

[TOKYO] The dollar picked up on Monday after taking a hit from weak US data last week that had fuelled speculation the Federal Reserve's rate hike would be delayed.

The US unit rose to 119.73 yen in Tokyo midday trade from 119.41 yen in New York late Friday.

The euro slipped to US$1.1425 from US$1.1446 while firming to 136.79 yen from 136.67 yen.

Another batch of disappointing US data Friday weighed on the dollar as they added to speculation that the economy was not strong enough and the Fed would need to delay its plan to raise near-zero interest rates.

But it recovered some ground Monday as players bought on dips.

"By a process of elimination, as long as the Fed is to move for a rate hike sooner or later, we have to buy dollars," a dealer at a major Japanese bank told Jiji Press news agency.

While the Fed is expected to raise its key rates this year, its European and Japanese peers are committed to massive stimulus.

On Friday, Fed data showed US industrial production fell 0.3 per cent in April, the fifth straight month of decline, while the University of Michigan's US consumer sentiment index sank to 88.6 in May from 95.9 in April.

That came after figures earlier in the week showed the US producer price index fell in April, confounding forecasts for a rise, while retail sales saw their weakest year-on-year growth since 2009.

AFP