Investing.com - The dollar slipped lower against the other major currencies on Thursday, as market sentiment recovered after global growth concerns dampened demand for riskier assets earlier in the week, but the greenback was still within close distance of a four-month high.
EUR/USD edged up 0.09% to trade at 1.1023, pulling away from Wednesday’s one-month low of 1.0979.
Market sentiment improved amid growing speculation major central banks around the world will introduce stimulus measures in order to boost economic growth.
On Thursday, investors were especially looking ahead to the European Central Bank’s policy statement, due later in the day.
Sentiment had weakened after the International Monetary Fund on Tuesday downwardly revised its projection for global economic growth in 2016 to 3.1%, from the prior 3.2%, though expecting a rebound to 3.4% in 2017.
GBP/USD was little changed at 1.3203 after a weak U.K. retail sales report added to concerns over the outlook for British economic growth
The U.K. Office for National Statistics said that retail sales dropped 0.9% in June, compared to the prior month’s 0.9% gain and expectations for a 0.6% fall. Year-on-year, retail sales increased 4.3%.
Core retail sales, which exclude automobiles, fell 0.9% last month, confounding expectations for a 0.6% decline.
The weak data added to concerns over the strength of the British economy after the IMF on Tuesday cut its U.K. growth forecast to 1.7% from the prior 1.9% for this year and slashing 2017 growth to 1.3% from April’s estimate of 2.2% due to the Brexit.
However, a separate report on Thursday showed that U.K. public sector net borrowing fell to £7.31 billion in June from an upwardly revised total of £9.41 billion the previous month. Analysts had expected public sector net borrowing to hit £9.20 billion last month.
USD/JPY tumbled 1.20% to 105.59, pulling away from a seven-week high of 107.48 hit overnight, while USD/CHF eased 0.09% to 0.9863.
The yen slightly recovered on Thursday, but remained under pressure amid mounting expectations for additional monetary easing by the Bank of Japan in its monetary policy statement next week.
The Australian dollar was higher, with AUD/USD up 0.44% at 0.7506, while NZD/USD slid 0.33% to 0.6998 after the Reserve Bank of New Zealand said that "further easing is likely", sparking expectations for a rate cut at its next policy meeting.
Elsewhere, USD/CAD edged down 0.11% to 1.3045.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.26% at 96.91, still close to the previous session’s four-month high of 97.37.