The dollar weakened against the majority of its most-traded counterparts as U.S. retail sales fell less than forecast, damping demand for haven assets. The U.S currency rose against the yen and Swiss franc after the retail sales report, which followed data this month showing slowing manufacturing and rising unemployment. Currencies of commodity-exporting countries, such as the Canadian and Australian dollars, rose the most against major peers as raw material prices gained. China reported increased retail sales and industrial output, spurring appetite for risk. “That the data is not negative actually has a big market impact; we’ve seen dollar-yen move higher,” said Jens Nordvig, a managing director of currency research in New York at Nomura Holdings Inc. “Better U.S. data is positive for U.S. growth and therefore supportive of Canada versus the dollar and supportive of Aussie versus the dollar.” The dollar fell 0.4 percent to $1.4475 per euro at 11:01 a.m. in New York, from $1.4413 yesterday. The greenback appreciated 0.3 percent to 80.49 yen, from 80.24. The Thomson Reuters/Jefferies CRB Index of commodities rose 0.2 percent and the Standard & Poor’s 500 Index gained 1.2 percent. Swiss Falls The Swiss franc dropped versus all of its 16 most-traded counterparts tracked by Bloomberg as the government lowered its forecast for 2012 economic growth and said further currency appreciation poses risks to its outlook. China’s retail sales rose 16.9 percent last month, while industrial production increased more than economists forecast, the statistics bureau reported. The 5.5 percent increase in China’s consumer-price index was the fastest in almost three years. Lenders were ordered to set aside more cash as reserves. Today’s data offset concern the fastest-growing major economy is cooling. New loans in China tumbled in May and money supply grew at the slowest pace since 2008, the central bank reported yesterday. “If you look at the trade numbers that came out of China they are still importing quite a bit,” said Kathy Lien, director of currency research with online currency trader GFT Forex in New York. “That means their demand remains strong and Aussie and kiwi are natural beneficiaries.” Aussie Gains Australia’s dollar rose 0.8 percent to $1.0691 and New Zealand’s dollar, known as the kiwi, added 0.5 percent to 81.95 U.S. cents. The South Pacific nations export raw materials to China. Canada’s dollar, which trades most with the U.S., rose the most against the dollar among the major currencies. The loonie advanced 0.8 percent to 96.83 Canadian cents per U.S. dollar, the strongest since June 1. Norway’s krone also rose, gaining 0.7 percent to 5.3949 per dollar. Oil, which both Canada and Norway export, rose as much as 1 percent to $98.29 per barrel. European Central Bank Governing Council member Mario Draghi said he shares the ECB’s opposition to a restructuring of Greek debt. “The ECB is not in favor of restructuring and haircuts” and it “excludes all concepts that are not purely voluntary,” Draghi told lawmakers in Brussels at his confirmation hearing for the ECB presidency today. He added that the “cost of a default would exceed the benefits” and a “default would not address the root causes of the crisis.” Greece Debate The ECB and Germany are at odds about how to bail out Greece again with German officials pushing for creditors to share some of the cost. Greece was branded yesterday with the world’s lowest credit rating by Standard & Poor’s, which said the nation is increasingly likely to face a debt restructuring and the first sovereign default in the euro area’s history. Retail purchases in the U.S. fell 0.2 percent in May, following a 0.3 percent increase in April, Commerce Department figures showed today in Washington. The median forecast of economists surveyed by Bloomberg News called for a 0.5 percent decrease. Wholesale costs in the U.S. rose more than forecast in May, led by higher prices for fuel, plastics and the fastest rise in 30 years for apparel and textile costs. The Bank of Japan kept the benchmark overnight rate in a range of zero to 0.1 percent and left unchanged its 30 trillion yen ($370 billion) lending facility and 10 trillion yen asset- buying program. The central bank also announced a 500 billion yen plan to make loans available to companies at 0.1 percent interest for two years, a move aimed at revitalizing an earthquake-hit economy by directing funds to industries. The yen has declined 1.5 percent this year versus the currencies of nine other developed nations as measured by Bloomberg Correlation-Weighted Indexes. The dollar is down 5.9 percent, while the euro is up 2.7 percent, according to the index. To contact the reporter on this story: Catarina Saraiva in New York at asaraiva5@bloomberg.net To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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