Investing.com - The euro rebounded from 12-year lows against the dollar on Thursday after a week of steep declines and data showing an unexpected drop in U.S. retail sales gave the single currency an additional boost.
EUR/USD rose 0.92% to 1.0644, up from an overnight low of 1.0495, the weakest level since March 2003.
The euro rebounded against the dollar as the greenback took a breather from a rally sparked by the diverging monetary policy stance between the Federal Reserve and central banks in Europe and Japan.
The single currency had already weakened broadly this year after the European Central Bank unveiled a trillion-euro quantitative easing program in January.
The euro turned sharply lower after the bank started asset purchases on Monday, pushing euro area bond yields to new lows.
Lower bond yields make the single currency less attractive to investors at a time when expectations are mounting that the Federal Reserve could start rising interest rates mid-year.
The single currency received an additional boost after data showing an unexpected drop in U.S. retail sales in February tempered expectations for an early rate hike.
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.
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.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies was last at 99.16, 0.49% lower for the day. Earlier Thursday the index rose to 100.05, a level last reached in April 2003.
Elsewhere, the euro also gained ground against the yen and sterling, with EUR/JPY up 0.59% to 128.82 and EUR/GBP advancing 0.75% to 0.7118, recovering from a seven-year trough of 0.7013.