Market info

Dollar boosted by retail sales

12 Feb  - Fundamental 

The dollar rose against major currencies Friday after a report showing retail sales improved in January and as investors continued to worry about economies abroad.

What prices are doing: The dollar climbed 0.5% versus the euro to $1.3629 and rose 0.1% against the U.K. pound to $1.5670. Against the Japanese yen, the dollar was up 0.3% at ¥90.02.

The dollar was mixed during the week amid lingering concerns about Greece's debt and after Federal Reserve Chairman Ben Bernanke outlined a plan to withdraw trillions of the dollars used to prop up the nation's economy.

What's driving prices: The Commerce Department said in a report Friday that retail sales rose 0.5% in January, compared with December's downwardly revised decline of 0.1%.

Economists surveyed by Briefing.com had anticipated that January sales would grow 0.3%.

The dollar was also boosted by stocks, which tumbled after China told banks to raise reserves for a second time this month

Meanwhile, a report showing slower-than-expected euro zone growth pressured the euro, pushing the dollar higher.

What analysts are saying: «With the problems in the euro zone not quite over, we'll probably see the dollar hold on to much of its strength,» said Kathy Lien, director of currency research at trading firm GFT.

But if a «massive» bailout package for Greece is introduced, Lien said a stronger euro will pressure the dollar.

«I do expect the bailout package to come, and when that comes, we'll see the dollar give back gains based on the improvement in risk appetite.»

© CNNMoney.com