The U.S. currency was little changed at $1.08425 per euro and slid 0.15 per cent to 151.15 yen after mounting a recovery on Wednesday from its sharpest declines against major peers in a year
The dollar held its ground early on Thursday after a volatile two days that saw steep drops followed by a rebound as traders took incoming economic data as signalling the Fed will wait longer before cutting interest rates.
The risk-sensitive Australian and New Zealand dollars dipped amid a drop in regional equities.
The U.S. currency was little changed at $1.08425 per euro and slid 0.15 per cent to 151.15 yen after mounting a recovery on Wednesday from its sharpest declines against major peers in a year.
The dollar index – which measures the greenback against the euro, yen and four other rivals – gained 0.11 per cent to 104.43. It added 0.31 per cent on Wednesday, after a 1.51 per cent slump the previous day.
The dollar drew support from better-than-expected retail sales figures along with more signs of a cooling of inflation, feeding into the narrative for an economic ‘soft landing’, which would allow the Fed more time before cutting rates.
Traders cut the odds for a first reduction by March to less than 1-in-4 from better than 1-in-3 a day earlier, as per the CME Group’s FedWatch Tool.
While inflation is declining, the economy remains robust, which might even allow the Fed to raise rates if they chose, although there does not seem to be appetite for a hike among Fed officials currently, said James Kniveton, senior corporate FX dealer at Convera.
Elsewhere, the Aussie slipped 0.29 per cent to $0.64905, and the New Zealand dollar dropped 0.5 per cent to $0.5993.
Australia’s currency failed to draw support from a strong bounce back in employment, as traders keyed on the fact that gains were mostly in part-time labour, while the jobless rate actually ticked higher.