* U.S. retail sales rise; jobless claims weaker than
* Euro near 2013 peak against dollar, five-year peak vs yen
* Swedish crown off as Riksbank cut seen certain after data
* Aussie dollar falls to lowest since late August
By Gertrude Chavez-Dreyfuss
NEW YORK, Dec 12 The dollar firmed across the
board on Thursday, helped by an upbeat U.S. retail sales report
that suggested the recovery of the world's largest economy is on
a stable footing.
That report, however, does not alter expectations as to how
soon the Federal Reserve will begin reducing its economic
stimulus, analysts said. Market participants still expect the
Fed to pare back its asset purchases no later than March 2014
and this has been reinforced after Thursday's
weaker-than-expected U.S. jobless claims data.
"The Fed is still going for a tapering in the first quarter
of the year. They would have to wait for more good economic
numbers to come into year-end before they do anything," said
David Pierce, director of business development for FX broker GPS
Capital Markets in Salt Lake City, Utah.
U.S. retail sales rose 0.7 percent in November, while
initial jobless claims rose 68,000 to 368,000 last week, the
largest weekly increase November 2012.
"The strong U.S. retail sales number was definitely a
positive factor for the dollar. This could lead to some upward
revisions in the gross domestic product for the fourth quarter,"
said Brian Dangerfield, currency strategist at RBS Securities in
The rise in jobless claims was a result of seasonal factors
given last week's big drop due to the Thanksgiving holiday, he
"I think the market is looking at today's outsized increase
in jobless claims as not necessarily an indication of a
weakening U.S. labor market," he said.
In midday trading, the dollar index rose 0.34 percent
to 80.16, rebounding after three days of losses.
The euro dipped 0.2 percent against the dollar to $1.3755
, threatening to end a seven-session streak of gains. It
has gained nearly 4 percent since Nov. 11 and is close to its
2013 peak of $1.3832.
The dollar advanced 0.9 percent against the yen to 103.35
, rising after two straight days of losses. The euro also
gained, up 0.6 percent at 142.16 yen, not far from a
five-year peak of 142.17 yen.
The Australian dollar fell sharply to US$0.8914, its
lowest since Aug. 30, hurt by comments from Reserve Bank of
Australia Governor Glenn Stevens saying that he prefers the
Aussie dollar to trade closer to US$0.85. The Aussie was last at
US$0.8936, down 1.25 percent.
He told the Australian Financial Review that a weaker
currency rather than lower interest rates would be a preferable
measure to ease financial conditions in Australia.
SWISS FRANC COOL TO SNB
The Swiss franc earlier rose against the euro, helped by
year-end flows into safe-haven Switzerland. It shrugged off
comments from the Swiss National Bank, which reiterated its
commitment to the euro/franc peg of 1.20 euros.
The euro fell to a seven-month low of 1.2197 francs
, but by late New York trade, the single euro zone
currency was up 0.1 percent at 1.2231 francs. The dollar, on the
other hand, climbed 0.3 percent to 0.8893 franc .
"Investors are concerned about the impact on risk appetite
of Fed tapering and this could underpin the Swiss franc," said
Jane Foley, senior currency strategist at Rabobank.
"Also, given the recent increase in disinflationary
pressures in the euro zone, it seems likely that ECB interest
rates will also remain at rock bottom for longer. This indicates
that there is less reason for euro/Swiss to appreciate soon,"
The Swedish crown was also a big mover of the day, falling
to a 1-1/2-year low against the euro after data bolstered the
case for a rate cut by Sweden's Riksbank. The euro, however,
remained supported by higher money market rates and year-end
repatriation by banks.
The Swedish crown fell to its lowest since May 2012 at
9.0978 crowns per euro after inflation data showed falling price
pressures with jobless numbers also painting a grim picture
about the Swedish economy.
"The market is extrapolating the data will see some action
from the Riksbank next week. This is driving down the crown,"
said Jeremy Stretch, head of currency strategy at CIBC World
Markets in London.