Dollar Loses Ground Against Major Rivals

(RTTNews) - The U.S. dollar weakened against its major rivals on Friday after Federal Reserve Governor Christopher Waller and St. Louis Fed President James Bullard, two of the central bank's most hawkish policymakers, supported a 75 basis points rate hike at the upcoming meeting.

The officials' remarks helped alleviate some fears of a 100-basis point hike.

The probability of a 100 basis point rate hike at the July meeting has receded to around 51% following the comments, according to CME Group's FedWatch Tool.

Data from the Commerce Department showed retail sales shot up by 1% in June after edging down by a revised 0.1% in May. Economists had expected retail sales to increase by 0.8% compared to the 0.3% dip originally reported for the previous month.

A separate report from the University of Michigan said the consumer sentiment index inched up to 51.1 in July from a record low 50.0 in June. The uptick surprised economists, who had expected the index to edge down to 49.9.

Inflation expectations also eased slightly, with one-year inflation expectations dipping to 5.2% in July from 5.3% in June and five-year inflation expectations slipping to 2.8% from 3.1%.

The Labor Department also released a report showing U.S. import prices crept up by much less than expected in the month of June, with a continued surge in prices for fuel imports partly offset by a decrease in prices for non-fuel imports.

The dollar index, which had surged to 109.29 earlier in the week, dropped to a low of 107.91 around noon today before regaining some lost ground. At 108.01, the index is down nearly 0.5% from the previous close.

Against the Euro, the dollar has weakened to $1.0087 from $1.0020.

The dollar is weaker against Pound Sterling at $1.1867, easing from $1.1825.

Against the Japanese currency, the dollar is trading at 138.55 yen, losing ground from 138.95 yen.

The dollar has slid to 0.6794 against the Aussie, and dropped to CHF0.9764 against the Swiss currency.

Against the Loonie, the dollar has weakened, fetching C$1.3027 a unit, compared with C$1.3117 on Thursday, as oil prices rose sharply.