DOLLAR WEAKER AHEAD OF YELLEN TESTIMONY, GREEK VOTE / THE WALL STREET JOURNAL

Dollar Weaker Ahead of Yellen Testimony, Greek Vote

Few investors made large bets ahead of Fed Chairwoman’s testimony to congress

By James Ramage

Updated July 14, 2015 4:25 p.m. ET
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Federal Reserve Chairwoman Janet Yellen is set to give her semi-annual monetary-policy testimony on Capitol Hill on Wednesday and Thursday. Photo: Manuel Balce Ceneta/Associated
Press


The dollar edged lower against the euro and the yen on Tuesday, as few investors made large bets a day before Federal Reserve Chairwoman Janet Yellen begins her semiannual monetary-policy testimony on Capitol Hill.

In addition, investors held back on currency trades during the session on growing concerns over whether Greek Prime Minister Alexis Tsipras can pass punishing austerity measures through parliament on Wednesday. Failure to do so would likely reignite fears that Greece could exit the euro area and upend markets over the near term.

The dollar slipped 0.1% against the common currency from the previous day, with one euro buying $1.1005 in late-afternoon trade. The U.S. currency also inched down 0.1% to 123.38 Japanese yen.

Earlier in the day, the dollar fell against rivals, as weak U.S. retail sales data for June signaled uneven consumer demand and dimmed expectations for economic growth over the second three months of the year.

U.S. retail sales in June decreased 0.3% from the previous month to a seasonally adjusted $442 billion, the Commerce Department said. That compares with economists’ expectations of a 0.2% rise. Numbers for May and April were also revised lower.

 

Though the data raise doubts about the U.S. economy’s robust recovery from a soft first quarter of 2015, investors are more likely to wait for Ms. Yellen’s comments to legislators and developments in Greece on Wednesday before making larger moves, said Richard Cochinos, head of Americas developed-market currency strategy at Citigroup Inc. C 0.67 % 
             
“Investors want to see how those turn out before betting on the euro and the yen right now,” Mr. Cochinos said. “It was only one bad retail sales number, and not sufficient to cause people to change their views or back out of positions.”

General uncertainty about the U.S. economy combined with global worries over the Greek debt crisis, falling commodity prices and China’s stock markets to push back expectations for the first Fed rate increase since 2006 toward the end of the year, or even into early 2016. Higher interest rates would draw yield-hungry investors to the dollar.