Investing.com - The euro rallied to one-week highs against the broadly weaker dollar on Wednesday after disappointing U.S. economic reports added to concerns over the outlook for second quarter growth after a sharp slowdown in the first quarter.
EUR/USD was up 1.09% to 1.1334, re-approaching the two-month high of 1.1391 set last Thursday.
The drop in the dollar came after reports showing U.S. retail sales were flat in April and import prices were lower for a tenth straight month.
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.
At the same time the Labor Department said import prices fell 0.3% last month after slipping 0.2% in March. Economists had expected an increase of 0.3%.
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.
In the euro zone, data on Wednesday 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.
The dollar fell to one-week lows against the yen and the Swiss franc, with USD/JPY down 0.53% to 119.22 and USD/CHF dropping to 0.9197.
The US dollar index, which tracks the greenback against a basket of six major rivals, fell to two-month lows of 93.83 from around 94.55 ahead of the data.