Dollar Weakens as Drop in U.S. Retail Sales Spurs Wagers on Fed
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The dollar dropped to the lowest in almost a month against the yen and erased gains versus the euro as U.S. retail sales unexpectedly fell, adding to bets the Federal Reserve is closer to a third round of asset purchases.
The euro touched a six-week low against the yen as inflation in the currency bloc matched the lowest since February 2011. The Dollar Index reversed an advance before Fed Chairman Ben S. Bernanke testifies to Congress tomorrow, even as U.S. five-year yields reached record lows. Higher-yielding currencies including South Africa’s rand and Mexico’s peso rose as implied volatility for currency options fell to an 11-week low.