Dollar's Downturn Continues - TheStreet

Dollar's Downturn Continues

Gold is losing $3.10 at $665.20 an ounce.
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The dollar briefly hit another record low against the euro Friday as a new government report showed shrinking retail sales in the U.S.

The euro was trading for $1.3797, up from $1.3781 late Thursday, but down from earlier in the session when it pierced the $1.38 level for the first time.

At the same time, the pound was stronger, buying $2.0347, up from $2.0297 previously. The dollar was changing hands for 122.11 yen, down from 122.5 yen a day earlier.

Contributing to the greenback's weakness was a Commerce Department report saying that retail sales for June fell 0.9%, far below the consensus forecast.

"This was a broadly poor report today. Electronics sales were down, and that's an indication that there is a spread of the housing softness into the consumer spending generally," says T.J. Marta, a fixed-income strategist at RBC Capital Markets in New York.

In the past, homeowners have fueled their spending by borrowing against the increasing value of their homes. But the retail sales report suggests that the stall in the housing sector has spilled over and resulted in reduced spending, Marta says.

The report only added to an already jittery foreign-exchange market, where traders are increasingly worried that the deteriorating quality of loans made to borrowers with poor credit histories will shake the financial system.

Exchange-traded funds that track the currencies, the

CurrencyShares Euro Trust

(FXE) - Get Report

, the

CurrencyShares Japanese Yen Trust

(FXY) - Get Report

and the

CurrencyShares British Pound Sterling

(FXB) - Get Report

, were all fairly steady.

Among precious metals, gold prices were slipping $3.10 at $665.20 an ounce, while silver prices were off 9 cents at $13.09 an ounce.

Prices for benchmark cooper contracts were up a penny at $3.63 a pound.

Elsewhere, Credit Suisse raised its stock price target on shares of

Alcoa

(AA) - Get Report

to $55 a share from $45, following news after the close Thursday that the company was dropping its hostile bid for rival

Alcan

(AL) - Get Report

.

The decision by Alcoa came after

Rio Tinto

(RTP)

announced that it had reached an agreement to purchase Alcan.

Alcoa shares were recently ahead 4% at $47, while Alcan was off almost 1% at about $98. Rio Tinto was losing 3.8% at $306 a share.