Dollar hits lowest in 3 weeks as sales forecast damps taper bets

The dollar slid to a three-week low against the yen (FOREX:USDJPY) before data tomorrow that economists said will show U.S. retail-sales growth slowed, strengthening the case against faster tapering by the Federal Reserve.

The Bloomberg Dollar Spot Index dropped for a third day after a report last week showed the U.S. added fewer workers in December than the most pessimistic projection in a Bloomberg News survey. Australia’s dollar climbed to a one-month high after home-loan growth exceeded analysts’ forecasts. The rand fell the most against the dollar and yen among 16 major currencies before a report tomorrow analysts said will show South African mining-production slowed.

“There are some occasional weak data-points, but the growth in the U.S. economy is far from being in doubt,” said Andrew Wilkinson, the Greenwich, Connecticut-based chief market analyst at Interactive Brokers LLC. “In the longer run, we’ll see dollar-yen trade at 110. There’s nothing changing in the overall picture, just that too many people have gotten on one side of the boat.”

The dollar slid 1.2% to 102.90 yen as of 3:35 p.m. New York time after falling to 102.86, the weakest since Dec. 18. It was little changed at $1.3669 per euro, having depreciated 0.6% last week. Japan’s currency climbed 1.2% to 140.71 per euro after touching 140.50, the strongest level since Dec. 6.

Aussie Rallies

Australia’s dollar strengthened against most of its 16 major peers as home-loan approvals climbed 1.1% in November from the previous month, faster than the median forecast for a 1% increase. Employers added 10,000 jobs last month after boosting positions by 21,000 in November, the nation’s statistics bureau will say on Jan. 16, according to a Bloomberg survey.

Australia’s dollar rose 0.7% to 90.59 U.S. cents after advancing to 90.86 cents, the highest since Dec. 11.

Mining output in South Africa increased 7.1% in the year through November, compared with 22% the previous month, a report will show tomorrow, the median estimate of economists in a Bloomberg survey showed. Mining commodities account for more than 50% of the country’s exports, according to government data.

The rand slipped 1.6% to 10.8143 per dollar and was 1.6% weaker at 14.7820 per euro.

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