- DXY rallies 0.65% to 95.25.
- EURUSD falls more than 100 pips to 1.1211 amid failing negotiations between Greece and troika over new bailout agreement.
- US retail sales climb 1.2% in May, the third consecutive monthly increase.
The US dollar recovered from mid-week lows on Thursday after the Commerce Department said retail sales rose faster than forecast in May, raising hope that the consumer-led recovery was regaining momentum in the second quarter.
The dollar index (DXY), a trade-weighted average of the greenback against a basket of competitor currencies, climbed to a daily high of 95.60. It would subsequently consolidate at 95.25, advancing 0.65 percent.
The dollar was reversing week-long losses against the euro, as the EURUSD fell more than 100 pips to 1.1211. Euro pairs have experienced significant volatility over the past two weeks as negotiations between Greece and its creditors over a new bailout agreement continue to falter.
US Retail Sales Rise Again in May
Retail sales in May rose for the third consecutive month, helping to offset declines between December and February.
Sales are retail stores and restaurants rose 1.2 percent to a seasonally adjusted $444.9 billion in May, the Commerce Department reported on Thursday. The increase was slightly bigger than forecast. The March and April figures were also revised up to show stronger consumption than previously estimated.
Retail sales were up 0.2 percent in April, up from an initial estimate of no change. Sales rose 1.5 percent in March, the strongest monthly increase in five years.
Twelve of the 13 retail categories posted gains in May, official data showed. Sales at motor vehicle and parts dealers increased 2 percent in May, while gasoline stations posted a 3.7 percent increase.
Retail sales are a key barometer of consumer spending, which accounts for more than two-thirds of US economic output. Consumers spent cautiously in the first quarter amid severe winter weather and a larger economic slowdown. The US economy contracted 0.7 percent annually in the first quarter, revised estimates showed last month.