(Recasts, adds new comment, U.S. data, FX table, byline, NEW YORK dateline, updates prices)
Traders on edge, watching for any Japan action on dollar/yen
Kwarteng's firing eases some of the problems -analyst
U.S. retail sales flat; data still supports Fed hike outlook
Sterling fell sharply against the U.S. dollar on Friday after British Prime Minister Liz Truss fired her finance minister and scrapped parts of their economic package that has caused so much turmoil in the UK's currency and bond markets.
The dollar, on the other hand, continued its march higher against a beleaguered yen, hitting a fresh 32-year peak of 148.38. It was last up 0.7% at 148.30 yen JPY=EBS . Traders are once again on the lookout for any potential action from the Japanese financial authorities to stem the currency's slide.
Japanese Finance Minister Shunichi Suzuki on Thursday reiterated the government's readiness to take steps against excessive currency volatility.
The pound, meanwhile, fell for a second straight day against the dollar, last traded at $1.1184, down 1.3% GBP=D3 .
Kwasi Kwarteng said he had resigned at Truss's request after being forced to rush back to London overnight from IMF meetings in Washington. He was replaced with former Foreign Secretary Jeremy Hunt.
Truss, in power for only 37 days, then told a news conference she would now allow a key business levy to rise from next year, raising 18 billion pounds, as she accepted she had gone "further and faster" than markets had been expecting.
"Kwarteng's resignation doesn't fix the problem but alleviates one of the problems," said Erik Nelson, macro strategist at Wells Fargo Securities in New York.
"We still have the BoE's (Bank of England) active gilt sales presumably at the end of this month. That's still quite disruptive and pound-negative. They still have the energy shock and now we have this question of how long this prime minister is going to last," he added.
The euro also rose against sterling to 87.04 pence, up 0.9% EURGBP=D3 Amid all the volatility and stress in the market, the dollar remained the safe haven. U.S. retail sales were unexpectedly unchanged in September as stubbornly high inflation and rapidly rising interest rates crimp demand for goods. The unchanged reading in sales last month followed an upwardly revised 0.4% increase in August. Sales in August were previously reported to have gained 0.3%. .
The report did not alter expectations that the Federal Reserve will deliver another 75 basis-point interest rate increase at next month's policy meeting.
"The question now is: Is the Fed going to go 75 (bps) again in December and the retail sales and yesterday's CPI (consumer price index) numbers are pointing more and more toward that," said Wells Fargo's Nelson. "It's reinforcing the dollar's dominance.
In other currencies, the euro fell 0.3% to $0.9746 EUR=EBS .
======================================================== Currency bid prices at 10:40AM (1440 GMT)Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Dollar index =USD 113.0600 112.5800 +0.44% 18.186% +113.3200 +112.1500 Euro/Dollar EUR=EBS $0.9741 $0.9778 -0.40% -14.33% +$0.9808 +$0.9708 Dollar/Yen JPY=EBS 148.3200 147.2200 +0.76% +28.86% +148.3700 +147.0900 Euro/Yen EURJPY= 144.49 143.95 +0.38% +10.87% +144.7500 +143.4900 Dollar/Swiss CHF=EBS 1.0031 1.0014 +0.11% +9.91% +1.0058 +0.9965 Sterling/Dollar GBP=D3 $1.1193 $1.1332 -1.23% -17.24% +$1.1365 +$1.1157 Dollar/Canadian CAD=D3 1.3854 1.3752 +0.75% +9.58% +1.3862 +1.3705 Aussie/Dollar AUD=D3 $0.6247 $0.6298 -0.81% -14.06% +$0.6347 +$0.6220 Euro/Swiss EURCHF= 0.9772 0.9788 -0.16% -5.76% +0.9790 +0.9742 Euro/Sterling EURGBP= 0.8697 0.8624 +0.85% +3.54% +0.8709 +0.8617 NZ NZD=D3 $0.5590 $0.5640 -0.80% -18.26% +$0.5681 +$0.5575 Dollar/DollarDollar/Norway NOK=D3 10.6490 10.5730 +0.96% +21.18% +10.6785 +10.5115 Euro/Norway EURNOK= 10.3756 10.3263 +0.48% +3.62% +10.3948 +10.2810 Dollar/Sweden SEK= 11.2874 11.2532 -0.08% +25.17% +11.3540 +11.1994 Euro/Sweden EURSEK= 10.9918 11.0010 -0.08% +7.40% +11.0155 +10.9696 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates https://tmsnrt.rs/2RBWI5E^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
