(Updates prices, analyst comments)
* Dollar falls broadly after weak U.S. data; Iraq violence
* Yen gains ahead of Bank of Japan meeting
* Kiwi jumps after RBNZ raises rates, keeps hawkish bias
By Sam Forgione
NEW YORK, June 12 The dollar slipped for a
second straight session against a basket of currencies on
Thursday after U.S. retail sales and weekly jobless claims data
showed weakness in the economy and curbed speculation of a
hawkish stance from the Federal Reserve.
The Commerce Department said retail sales gained 0.3 percent
last month, missing expectations for a 0.6 percent rise. April's
retail sales, however, were revised to show a 0.5 percent
"The retail sales data was a bit concerning for people
anticipating stronger growth, and if you're not going to get
stronger growth, that brings down the expectations for higher
Fed rates," said Joseph Trevisani, chief market strategist at
WorldWideMarkets in Woodcliff Lake, New Jersey.
The Fed's upcoming monetary policy meeting is next week.
In a separate report, the Labor Department said initial
claims for state unemployment benefits climbed 4,000 to a
seasonally adjusted 317,000 for the week ended June 7, exceeding
The dollar fell against the euro for the first time in five
trading sessions, although the euro was not far from a
four-month low of $1.3503 hit last week after the European
Central Bank cut rates to record lows.
A drop in U.S. Treasuries yields narrowed the gap between
yields on U.S. Treasuries and German bunds, leading traders to
take profits on the dollar's rally against the euro, said Omer
Esiner, chief market analyst at Commonwealth Foreign Exchange in
The dollar also fell on worries that violence in Iraq would
disrupt oil supplies. Traders said violence in the
second-largest OPEC producer raised concerns of larger
geopolitical conflict and a sustained period of higher oil
"This could potentially signal a broader destabilization in
the region," said Esiner, who added that the impact of higher
oil prices could hurt U.S. consumer spending.
The dollar fell against the yen, which has advanced in
recent sessions after strong economic data reduced expectations
for further Bank of Japan monetary easing. The central bank's
latest two-day policy meeting starts Thursday.
The New Zealand dollar, meanwhile, rallied after the Reserve
Bank of New Zealand hiked base rates by 25 basis points to 3.25
percent, drawing demand for the higher-yielding currency.
The U.S. dollar index, which measures the dollar
against a basket of six major currencies, was last down 0.28
percent at 80.565. The euro was last up 0.18 percent
against the dollar at $1.3554.
The dollar was last down 0.43 percent against the Japanese
yen at 101.63 yen, and was last down 0.22 percent against
the Swiss franc to trade at 0.8982 franc. The New Zealand
dollar last traded up 1.48 percent at $0.8692.
Benchmark 10-year U.S. Treasury notes were last
up 14/32 in price to yield 2.588 percent. Debt prices rallied on
the weak U.S. data and a robust auction of 30-year bonds.
(Reporting by Sam Forgione; Additional reporting by Patrick
Graham in London; Editing by James Dalgleish)