Dollar Pares Loss in Choppy Session; Data Whisper Traps Bears
- Fast price swings, thin liquidity before long weekend
- Retail sales miss offset by upward revision to prior month
The dollar swung between gains and losses to trade down ~0.2% as measured by the Bloomberg dollar index in a roller-coaster ride at the end of the week amid moderate trading flows and sparse liquidity that allowed for some sharp price swings as traders trimmed positions before a long weekend in the U.S.
The dollar, which remains lower against most of its G-10 peers, fell to a fresh low for the day ahead of data that showed December retail sales rose 0.6% m/m vs estimates for a gain of 0.7%. The shortfall was offset by an upward revision of a tenth of a percent to November’s data, putting the overall outcome above a “whisper” number for a considerably weaker report, thereby fueling an intraday short squeeze that was felt strongest in dollar-yen and in Treasury yields.