Investing.com - The dollar dropped to three-month lows against a basket of other major currencies on Wednesday, after data showed that U.S. retail sales rose less than expected in April fuelling fresh concerns over the strength of the country's recovery.
The Commerce Department said retail sales were unchanged, compared to expectations for a 0.2% increase. March’s figure was revised up to show a 1.1% increase from 0.9%, but this was offset by underlying weakness in the report.
Core retail sales, which exclude automobile sales, rose just 0.1%, undershooting forecasts for a 0.5% gain.
The data underlined expectations that the Federal Reserve will delay hiking rates until later in the year, after recent figures showed that the U.S. economy expanded just 0.2% in the first quarter.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.94% to 93.81, the lowest level since February 6.
EUR/USD rallied 1.06% to one-week highs of 1.1331.
In the euro zone, data showed that the economy grew 0.4% in the first quarter of 2015, shy of expectations for growth of 0.5% but still the fastest rate of growth in four years.
The French economy grew 0.6% in the first quarter, the fastest rate of growth in two years.
Germany’s economy, the euro area’s largest, grew 0.3% in the first quarter, slowing from 0.7% in the previous quarter.
GBP/USD edged up 0.14% to 1.5692, close to five-month highs of 1.5743 hit earlier in the session.
Earlier Wednesday, the Bank of England trimmed its forecast for growth this year to 2.4%, down from 2.9% three months ago.
The central bank also said it expects inflation, which currently stands at a record-low zero, to return to its 2% target in two years' time, little changed from its last report.
Earlier Wednesday, the U.K. Office for National Statistics said the unemployment rate ticked down to 5.5% last month from 5.6% in March, hitting the lowest level since September 2008.
The report also showed that the U.K. claimant count change dropped by 12,600 in April, confounding expectations for a 20,000 decline.
Elsewhere, the dollar was lower against the yen and the Swiss franc, with USD/JPY sliding 0.55% to 119.19 and with USD/CHF down 1.04% to 0.9196.
The Australian and New Zealand dollars were sharply higher, with AUD/NZD up 1.52% to more than three-month highs of 0.8096 and NZD/USD rallying 1.52% to 0.7474.
Meanwhile, USD/CAD dropped 0.42% to trade at four-month lows of 1.1969.