The dollar and yen firmed on Thursday, attracting safe-haven bids due to concerns about weakness in global stock markets and the effectiveness of government policies around the world to combat recession.
This tense climate throughout financial markets fueled strong demand for government debt, another safe-haven destination. On the other hand, the biggest losers among major currencies were the Australian and New Zealand dollars, which have a relatively high yield and attract investors when they are interested in riskier investments.
However, the U.S. dollar regained some ground versus the yen and pared gains against the euro early in New York trading after data showed an unexpected rise in U.S. retail sales last month.
Sales at U.S. retailers unexpectedly rebounded in January, likely boosted by post-holiday discounts. Markets were expecting an 0.8 percent contraction in January sales.
"It is the sort of tonic that can soothe the market to an extent," said Brian Dolan, chief currency strategist, at Forex.com in Bedminster, New Jersey.
"We've been keying on things not necessarily getting better but at least deteriorating at a slower rate. And this builds that case."
In the currency market, he said the report has encouraged investors' risk appetite.
The dollar rose to 90.18 yen , down 0.3 percent on the day. The euro slipped 0.4 percen to 1.2849.
