Dollar Accelerates Lower Along With U.S. Stocks

16/10/2014 08:37 AST

The dollar was significantly weaker Wednesday as U.S. stocks continued their sell-off on Wall Street amid growing fears of a global economic slowdown.

A downbeat U.S. retail sales helped drive the dollar lower, as traders bet the Federal Reserve will delay an interest rate beyond next Spring.

U.S. retail sales fell dropped 0.3 percent last month after a 0.6 percent gain in August, the Commerce Department said.

The Labor Department released a report on Wednesday showing an unexpected drop in U.S. producer prices in the month of September.

The Labor Department said its producer price index for final demand edged down by 0.1 percent in September after coming in unchanged in August.

Meanwhile, Europe's economic engine Germany has projected anemic growth for the next two years.

The German Ministry of Economic Affairs slashed its forecast of growth this year to 1.2 percent, a significant downward revision from the 1.8 percent growth expected earlier in the year.

Growth for 2015 was also revised down to 1.3 percent from 2 percent, the ministry said.

Despite the dismal German outlook, the dollar dropped more than a penny to $1.28 versus the euro, its lowest since late September. This week's losses have driven the dollar from recent 2-year highs around $1.25.

The buck also extended weekly losses versus the yen, sliding near Y106. Just recently the dollar touched a 6-year high near Y110.

The dollar was able to maintain this week's gains versus the slumping sterling, bouncing back and forth near $1.5950.

RTT News