Investing.com - The dollar slid to session lows against a basket of other major currencies on Thursday after data showing an unexpected drop in U.S. retail sales tempered expectations for a mid-year rate hike by the Federal Reserve.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, hit lows of 98.65 and was last at 99.12, 0.53% lower for the day. Earlier the index rose to 100.05, a level last reached in April 2003.
The Commerce Department reported that retail sales fell 0.6% in February, the third consecutive monthly decline. Economists had forecast in increase of 0.3%.
Core retail sales, which exclude automobiles, gasoline and food, were flat following a 0.1% decline in January.
Another report showed that U.S. import prices rose 0.4% in February, snapping seven months of declines, but the report indicated that inflation pressures remained muted due to lower petroleum prices.
The reports prompted investors to push back expectations for a mid-year rate hike by the Fed, weighing on the greenback.
At the same time the Labor Department reported that the number people filing new claims for unemployment benefits fell by 36,000 to 289,000 last week, indicating that the recovery in the Labor Market is continuing to strengthen.
EUR/USD was last at 1.0602, after falling to fresh 12-year lows of 1.0495 earlier in the session, pressured lower by the European Central Bank’s trillion-euro stimulus program.
The euro rebounded against the dollar earlier Thursday as the dollar took a breather from a rally sparked by the diverging monetary policy stance between the Fed and central banks in Europe and Japan.
USD/JPY was down 0.39% to 120.98, off the almost eight-year highs of 121.67 struck earlier Thursday.
GBP/USD gained 0.22% to trade at 1.4959, while USD/CHF slid 0.67% to 1.0023.
The Australian and New Zealand dollars were sharply higher, with AUD/USD rallying 1.51% to 0.7711 and NZD/USD jumping 1.67% to 0.7414. Meanwhile, USD/CAD was down 0.79% to 1.2643.