New York--The dollar retreated for a second day in a row Wednesday following another round of mostly lackluster US economic data.
US industrial production fell 0.6 percent in March, according to the Federal Reserve. That was twice the decline projected by analysts.
Analysts also cited a disappointing report from the New York Federal Reserve, whose Empire State index on manufacturing activity plunged into negative territory in April for the first time since December.
But the Fed's Beige Book report, a snapshot of economic conditions, said nine of the central bank's 12 district reported "moderate" or "modest" growth, with a tenth seeing "slight" growth and two others "steady."
The European Central Bank voted to keep interest rates at their current all-time lows, as expected, and rejected speculation of an early end to its ultra-easy money policy . ECB chief Mario Draghi said the bank's monetary stimulus policy was working.
The mixed US data came on the heels of a disappointing US retail sales report that had dented the dollar on Tuesday.
"In the past 48 hours, the sentiment in the market has changed significantly with investors now worried that the dollar has peaked," said BK Asset Management managing director Kathy Lien.
Still, Lien largely dismissed that concern in light of the tone of the Beige Book.
Other analysts also said the greenback's retreat was likely short-lived.
"More perceived weakness in upcoming US economic data could push out the expected timing of a Fed rate hike," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange.
"However, any pullback in the dollar will likely continue to be viewed as a buying opportunity, which should keep any sustained losses for the greenback limited."
2100 GMT Wednesday Tuesday
EUR/USD 1.0684 1.0654
EUR/JPY 127.29 127.24
EUR/CHF 1.0303 1.0360
EUR/GBP 0.7198 0.7208
USD/JPY 119.14 119.44
USD/CHF 0.9644 0.9724
GBP/USD 1.4842 1.4780
AFP
