Dollar Loses Ground After Weak Economic Data

(RTTNews) - The U.S. dollar shed ground against its major counterparts on Thursday after data showing a bigger than expected drop in retail sales in the month of January raised the possibility of an interest rate cut in June.

The Commerce Department report said retail sales slid by 0.8% in January after climbing by a downwardly revised 0.4% in December. Economists had expected retail sales to edge down by 0.1% compared to the 0.6% increase originally reported for the previous month.

A report from the Federal Reserve showed industrial production in the U.S. unexpectedly edged slightly lower in the month of January.

The Fed said industrial production slipped by 0.1% in January compared to economist estimates for a 0.3% increase.

The Labor Department released a report showing an unexpected decline in first-time claims for unemployment benefits in the week ended February 10th.

The report said initial jobless claims fell to 212,000, a decrease of 8,000 from the previous week's revised level of 220,000. Economists had expected initial jobless claims to inch up to 220,000 from the 218,000 originally reported for the previous week.

The Labor Department also released a separate report this morning showing an unexpected increase U.S. import prices in the month of January.

The dollar index, which dropped to 104.18 around mid morning, recovered some lost ground subsequently, but was still down more than 0.4% at 104.28.

Against the Euro, the dollar weakened to 1.0773, and against Pound Sterling, it eased to 1.2601. The dollar was down against the Japanese currency, fetching 149.94 yen a unit, compared to 150.60 yen Wednesday evening.

Against the Aussie, the dollar weakened to 0.6525, giving up more than 0.5%. The Swiss franc firmed to 0.8799 a dollar, gaining from 0.8858. The Loonie strengthened to 1.3466 against the greenback, firming from 1.3546.