NEW YORK: The US dollar hit a more than three-month low against a basket of major currencies on Wednesday after weaker-than-expected US retail sales data for April supported expectations that the Federal Reserve would wait until later to hike rates.
US retail sales were unchanged in April as households cut back on purchases of automobiles and other big-ticket items.
The data suggested the economy was struggling to make a strong rebound after barely growing in the first quarter, when harsh winter weather and low energy prices weighed on the US economy.
In addition to the retail sales data, other information released Wednesday showed the 10th straight month of declining import prices in April.
"So much for the cold-weather snapback," said Richard Franulovich, senior currency strategist at Westpac in New York. "The Fed can afford to be very patient."
Traders are watching US economic data closely for signs of when the Fed will hike interest rates from rock-bottom levels, a move which is expected to boost the dollar by driving investment flows into the United States.
The dollar index, which measures the greenback against a basket of six major currencies, hit a more than three-month low of 93.667.
The move was less dramatic against individual currencies, with the dollar falling to nearly one-week lows against the euro, yen and Swiss franc.
While the euro rose above 1 percent against the dollar to a session high of $1.13505, it failed to break past last Thursday's more than two-month peak of $1.1392.
The euro held within the past week's ranges in part because of greater stability in bond yields, said Shahab Jalinoos, global head of FX strategy at Credit Suisse in New York.
German 10-year Bund yields were last down on the day at 0.66 percent after hitting their highest level of the year at 0.80 percent last week, while 10-year US Treasury yields were also lower on the day at 2.23 percent after hitting six-month highs of 2.37 percent on Tuesday.
"I'm looking for more muted ranges, more sideways trading in FX," Jalinoos said.
The euro was last up 1.08 percent against the dollar at $1.13350.
The dollar was last down 1.03 percent against the Swiss franc at 0.92000 franc and was down 0.49 percent against the yen at 119.280 yen.
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