The U.S. dollar held its ground Wednesday, with a key index hovering above four-month lows ahead of data on April retail sales.
The dollar index ) , a measure of the greenback against a trade-weighted basket of six major currencies, traded at 82.317 in recent action, up from 82.267 in late North American trade on Tuesday. Earlier Tuesday, the index hit a four-month low near 82.00.
The Commerce Department is expected to report a 0.2% rise in April retail sales at 8:30 a.m. Eastern time, following a 1.2% decline the previous month, according to a MarketWatch survey of economists. Excluding autos, sales are expected to show a 0.4% rise after a 1% decline in March.
An upbeat report could put renewed pressure on the dollar, which has seen support from safe-haven flows dry up on ideas the deep global economic downturn is set to bottom out in coming months.
"Today's U.S. retail sales report is now key, to ensure that the U.S. dollar sell-off holds momentum. Our core outlook remains for an upside risk to the report, [but] we are mildly cautious that Easter effects could distort the data," wrote strategists at Bank of Scotland.
The British pound, meanwhile, tumbled after the Bank of England's quarterly Inflation Report offered a downbeat assessment of the U.K. economic outlook, forecasting growth to continue to contract over 2009 before returning to growth in 2010. See full story.
The pound traded at $1.5149, down from $1.5265 late Tuesday.
The euro was little changed versus the dollar, hovering at $1.3631 in recent action. The dollar slipped 0.3% versus the Japanese yen to 96.08 yen.
