came off their peaks.
Better-than-expected
U.S. inflation and retail sales data had backed expectations of an early rate
hike by the Federal Reserve, sending the dollar index to 101.76 .DXY on
Wednesday, a peak unseen since Jan. 12. It has since retreated to 100.92 in the
Asia session on Thursday.
The dollar
also came off from a 2-1/2-week high of 114.95 JPY= marked on Wednesday against
the yen, touching a low of 113.73. It was last down 0.3 percent at 113.84 yen.
"The
dollar is struggling as U.S. Treasury yields retreated from highs," said
Junya Tanase, chief currency strategist at JPMorgan Chase Bank in Tokyo.
U.S. benchmark
10-year Treasury note yields slipped to 2.484 percent US10YT=RR on Thursday,
after climbing to a three-week high of 2.524 percent on Wednesday following the
upbeat U.S. data.
Data on
Wednesday showed U.S. consumer prices recorded their biggest gain in nearly
four years, jumping 0.6 percent in January. Retail sales also outpaced
expectations, increasing 0.4 percent last month compared to the analysts' poll
of 0.1 percent. ECONUS
But some
analysts also noted that the data may not be as strong as it appears, while
industrial output and a gauge on home builder sentiment took unexpected spills.
"Retail
sales seemed to have been boosted by higher prices rather than an increase in
the real consumption," said Shin Kadota, senior forex strategist at
Barclays.
"Investors
also took profit as the dollar was trading high this week," added Kadota.
Up until
Tuesday, the dollar index had enjoyed a 10-session winning streak.
Fed Chair
Janet Yellen offered no additional insight on the timing of the central bank's
next rate hike in her second day of economic testimony before Congress on
Wednesday.
On Tuesday,
Yellen hinted more rate hikes were on the way as the jobs market has improved
and inflation has shown signs of nearing the Fed's two percent goal.
Markets will
get another chance to check the U.S. economic pulse from another batch of data,
including housing starts, building permits and the Business Outlook Survey by
Reserve Bank of Philadelphia. ECONUS
The euro edged
up 0.15 percent at $1.0614, recovering from a five-week trough of $1.052 EUR= touched
on Wednesday.
Elsewhere, the
Australian dollar hovered near a three-month high following a slightly
better-than-expected reading in the country's January employment data.
The Australian
dollar last traded at $0.7709 AUD=D4 after
touching $0.7732, its highest since Nov. 10.
Sterling last
stood at $1.2460 GBP=D4,
edging up from a one-week trough of $1.2384 touched on Wednesday, knocked by
slowing wage growth in the fourth quarter - bad news for British consumers
facing a surge in inflation in the months ahead.
*REUTERS*
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