Poor US retail data pushes dollar lower

The US dollar slipped against the euro for the second straight session Monday, on the back of a disappointing report on US retail sales in June.

At 2100 GMT, the euro pushed to $1.2271 from $1.2248 late Friday, though still well below the $1.26 level seen at the beginning of July.

The dollar's fall came after US retail sales figures fell 0.5 percent in June, against an expected 0.2 percent increase.

It was the third straight month the figure fell, and increased speculation that the Federal Reserve could be pushed to move to ease already extremely low long-term interest rates.

"Put in perspective, there hasn't been three straight months of decline in retail sales since the fourth quarter of 2008 at the height of the global recession," said Neal Gilbert of forex specialists GFT.

"Markets reacted in a way that has become customary in the current environment," he said.

"Everyone, it appears, was jumping back on the bandwagon in anticipation that the Federal Reserve will be ingratiating the market with a third round of quantitative easing."

Eyes will be on Fed Chairman Ben Bernanke for any hints of new stimulus on Tuesday when he testifies before Congress on the economy.

Also dampening interest in riskier positions was the IMF's newest assessment of the global economy: the crisis lender cut 0.1 percent off its global growth rate forecast, to 3.5 percent, and warned that risks to growth had risen in recent months.

The yen was a beneficiary, pushing higher against both major currencies.

The euro was at 96.40 yen from 97.08 yen Friday, while the dollar was at 78.83 yen, compared to 79.17.

The British pound rose to $1.5634 from $1.5566. The dollar slipped against the Swiss franc, to 0.9785 francs from 0.9803 francs.

pmh/sst