Dollar trades near four-month low on disappointing U.S. economic reports
Retail sales were unchanged in April from a revised of 1.1 percent in March, reflecting the continuation of weak spending with the beginning of the second quarter.
The awaited rate hike decision by the Fed is likely to occur late this year, instead of prior estimates of seeing it in June.
Investors will keep tracking U.S. data, as they know the Fed would not raise its borrowing cost unless the economy’s fundamentals are showing progress.
As of 13:30 GMT, the U.S. will release its unemployment claims data, where analysts predict a rise in first-time applicants for jobless claims to 272,000 last week from 265,000.
The latest nonfarm payrolls report signaled a rise in jobs creation and drop in unemployment rate in April, but wage growth remained weak.
The dollar index dropped to hit a low of 93.20, the lowest in nearly four months, while currently hovering around 93.50.
The six-currency gauge had climbed to 12-year highs above 100.0 in March after strong U.S. economic data raised expectations the Fed may raise interest rates earlier than anticipated.
The monthly chart for the dollar index shows that it corrected 23.6% from the upside rally which started from a low of 70.70 hit in March 2008.
This level may give support to the dollar index, but the RSI 14 momentum indicator signals that more drop could happen as the price exits overbought areas.