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Dollar index off lows hit after retail sales report

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Investing.com -

Investing.com - The dollar backed off lows against the other major currencies on Wednesday, after falling earlier in the day when official data showed that U.S. retail sales were flat in July.

The drop in the dollar came after the Commerce Department reported that U.S. retail sales were flat last month, disappointing expectations for a 0.2% increase.

Core retail sales, which exclude auto sales, rose just 0.1% in July, compared to expectations for a 0.4% gain.

EUR/USD was up 0.10% to 1.3382, off highs of 1.3415.

The euro had fallen to almost nine month lows earlier Wednesday after data showed that euro zone industrial output unexpectedly declined in June, adding to fears that the recovery in the region is faltering.

Investors were looking ahead to euro zone data on economic growth and inflation on Thursday, amid expectations for weak readings. Weak reports would add to pressure on the European Central Bank to implement fresh measures to bolster growth after it cut rates to record lows in June.

The dollar was slightly higher against the yen, with USD/JPY up 0.12% to 102.37, not far from session lows of 102.23. USD/CHF eased 0.09% to 0.9067.

The pound slumped to 10-week lows, with GBP/USD down 0.66% to 1.6700.

Sterling weakened broadly after the Bank of England cut its wage growth forecast and said the rate of wage growth would be critical in determining the future timing of rate hikes.

Earlier Wednesday, the latest U.K. jobs report showed that average earnings in the U.K. contracted 0.2% in the three months to June. It was the first decline since 2009.

The weak wage growth data offset a decline in the unemployment rate to 6.4% and a drop in the number of people claiming jobless benefits.

The Australian and New Zealand dollars were higher, with AUD/USD advancing 0.43% to 0.9307 and NZD/USD jumping 0.77% to 0.8465. Meanwhile, USD/CAD dipped 0.06% to 1.0916.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, inched up 0.04% to 81.60, off lows of 81.41.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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