*
Rate-cut wagers rise after dovish comments from
policymakers
*
Dollar wobbles but holds ground on shifting expectations
*
US retail sales miss forecast, producer prices rise
*
US consumer confidence dips in November
*
Yen locked in on intervention zone, traders keep wary eyes
(Recasts with new comments, US data, updates prices)
By Gertrude Chavez-Dreyfuss and Ozan Ergenay
NEW YORK/LONDON, Nov 25 (Reuters) - The U.S. dollar slid
on Tuesday as a slew of mixed economic data, some delayed and
therefore dated, reinforced expectations that the Federal
Reserve will cut interest rates next month.
In U.S. late morning trading, the euro was up 0.5%
against the dollar at $1.1577, while sterling gained 0.6%
to $1.3184.
The dollar index, a measure of its performance
against its major counterparts, fell 0.5% to 99.746 following
the release of September retail sales and producer price data,
after it initially held on to its gains from last week when the
index rose nearly 1%.
"Producer prices were stable and retail sales showed a
modest consumer slowdown, and this keeps a December rate cut on
the table," said Scott Helfstein, head of investment strategy,
at Global X, in emailed comments.
Data showed U.S. retail sales rose 0.2% in September, less
than 0.4% forecast by economists polled by Reuters and slowing
from an unrevised 0.6% gain in August.
Producer prices, on the other hand, increased 0.3%, in line
with expectation, after an unrevised 0.1% drop in August;
however, at the core level prices inched up 0.1%, below the
consensus forecast of 0.2%.
In addition, the latest U.S. consumer confidence number
declined to 88.7 in November, from an upwardly revised 95.5 in
October, which further hurt dollar sentiment. Economists polled
by Reuters had forecast the index edging down to 93.4 from the
previously reported 94.6 in October.
"More worries about what lies ahead ... hence, putting
purchases for major items on hold," wrote Jennifer Lee, senior
economist at BMO in emailed comments.
The economic data followed dovish comments from policymakers
in the past few days that helped cement rate cut expectations.
On Monday, Fed Governor Christopher Waller said the job
market was weak enough to warrant another quarter-point rate cut
in December, though action beyond that depended on a flood of
data that was delayed by the federal government shutdown.
Waller's comments followed similar remarks by New York Fed
President John Williams on Friday.
Traders are now pricing in an 83% chance of a cut next
month, up from 50% a week earlier, CME FedWatch showed. That
huge swing underscores the challenge the market faces in pricing
in near-term rates in the absence of economic data caused by the
longest-ever U.S. government shutdown, which ended on November
14.
Francesco Pesole, currency analyst at ING, said some
"year-end rebalancing flows before Thanksgiving may be getting
in the way" of dollar weakening.
However, he added in a note to clients, "unless markets have
a hawkish rethink, the dollar looks too strong relative to
short-term rate differentials at these levels, and we see some
material downside risks."
In other currency pairs, the yen, which has been on
the defensive since hitting 10-month lows last week, firmed on
Tuesday to 156.055 per dollar, leaving the dollar down 0.5%
against the Japanese currency.
Investors have been waiting for any signs of official buying
from Tokyo to support its currency, which has weakened by nearly
10 yen since the start of October after fiscal dove Sanae
Takaichi took over as Japan's prime minister.
Pesole said thinner liquidity around Thanksgiving could
present good conditions for the Bank of Japan to intervene in
USD/JPY, ideally after a market-driven correction in the pair.
Currency
bid
prices
at 25
November
? 03:58
p.m. GMT
Descript RIC Last U.S. Pct YTD High Low
ion Close Chang Pct Bid Bid
Previous e
Session
Dollar % 696
Euro/Dol 2
Dollar/Y % .91
Euro/Yen Dollar/S Sterling 5 309
6?
Dollar/C 101
Aussie/D % 643
6
Euro/Swi Euro/Ste NZ % 2 592
ollar
Dollar/N ? 2 217
8
Euro/Nor Dollar/S % 34
Euro/Swe
Print
