Investing.com - The dollar pared back gains against the yen on Tuesday after data showed that U.S. retail sales rose less-than-accepted in April, dampening expectations for stronger economic growth in the second quarter.
USD/JPY was last trading at 102.14, down from an intra-day high of 102.34
The pair was likely to find support at 101.78, Monday’s low and resistance at 102.65.
The dollar turned lower after the U.S. Commerce Department reported that retail sales rose just 0.1% last month, missing expectations for a 0.4% increase. Retail sales for March were revised up to a 1.5% gain from a previously reported increase of 1.2%.
Rising retail sales over time correlate with stronger economic growth, while weaker sales signal a declining economy.
Core retail sales, which exclude automobile sales, were flat in April, disappointing forecasts for a 0.6% increase. Core sales in March were revised up to a rise of 1% from a previously reported increase of 0.7%
The euro pared back losses against the dollar following the release of the data, with EUR/USD trading at 1.3721, up from a one-month low of 1.3699.
The euro fell to session lows earlier following reports that Germany’s Bundesbank is open to more stimulus measures from the European Central Bank.
The Wall Street Journal reported the German central bank would back monetary easing measures if they were needed to keep persistently low levels of inflation from becoming entrenched in the euro zone.
The ECB warned last week that it is “comfortable” with acting at its next meeting in June after it has a chance to review the latest economic projections.
The single currency also came under pressure after data showed that German economic sentiment slumped to a 16-month low in May.
The ZEW Centre for Economic Research reported that its index of German economic sentiment dropped to 33.1 this month from 43.2 in April. Analysts had expected a reading of 41.0.
The current conditions index improved to 62.1 from 59.5 in April, ahead of expectations of 60.5.
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