LONDON: The dollar was weaker against the euro and yen on Thursday, hurt by a batch of soft data that have raised concerns about the pace of economic recovery in the United States.
Gains for the single currency were likely to be limited by strong expectations of an interest rate cut by the European Central Bank next week. Senior sources involved in the deliberations say momentum is building for action to help a euro zone economy which has slipped back into recession.
Still, the euro gained 0.2 percent on Thursday to $1.3035 , moving away from a low of $1.2954 struck a day earlier after a German survey of business morale came in weaker than expected. There was support from signs that two months of political gridlock in Italy was coming to an end.
The dollar index, which measures it against a basket of currencies, fell 0.3 percent to 82.808, having risen to 83.190 on Wednesday, its highest since April 4. It was down 0.2 percent to 99.20 yen.
"We are dollar positive, but we recognise it will not be a straight line," said Neil Mellor, currency strategist at Bank of New York Mellon.
"We are seeing some softness in the dollar and the data, and given what the Fed is saying, we expect it to stay as a funding currency."
Orders for durable goods marked their biggest drop in seven months in March, the US jobs market has remained sluggish and retail sales have been weak, factors which could keep the Federal Reserve's ultra-loose policy well in place.
Gross domestic product data on Friday is expected to show the US economy grew at a 3.0 percent annual pace in the first quarter, accelerating from a 0.4 percent rate in previous period, though economists predict that has slowed to around 1.5 percent in the current quarter.
"Markets overall have been focused on earnings, but poor data in the US is raising concerns about the US outlook," said a foreign exchange market advisor at a Japanese firm in Tokyo.
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