Investing.com - The dollar regained ground against the other major currencies on Thursday as the rate of the fall in the yuan eased, but the greenback remained on the back foot amid worries that the Federal Reserve could keep rates on hold for longer.
EUR/USD was down 0.45% to 1.1107 from Wednesday’s one-month highs of 1.1213.
The yuan weakened slightly on Thursday, but the rate of the decline slowed after China's central bank said there was no basis for further depreciation in the currency, given China's strong economic fundamentals.
The yuan has fallen almost 5% against the dollar this week after China devalued its currency in a surprise move on Tuesday in a bid to shore up growth in the flagging economy.
The People’s Bank of China has described the move as a “one-off depreciation”, based on a new way of managing the exchange rate that better reflected market forces.
The dollar gained against the yen, with USD/JPY rising 0.28% to 124.56, but remained below Wednesday’s one-month peaks of 125.27.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.33% to 96.61, pulling back from Wednesday’s one-month trough of 95.94.
Sentiment on the dollar remained fragile as investors pushed back expectations for the Fed to hike interest rates in September as the decline in the yuan fueled concerns over global inflation expectations and the outlook for growth in China.
The U.S. was to release what would be a closely watched report on retail sales later in the trading day. The consensus forecast was for a 0.5% increase in July after a 0.3% decline in the previous month.