Investing.com - The dollar slid lower against a basket of the other major currencies on Thursday as investors took profits despite better-than-expected U.S. economic data and a brighter outlook for interest rate hikes.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.31% to 100.77. The index touched highs of 101.75 on Wednesday, the strongest level since January 12.
Data on Wednesday showed that U.S. consumer price inflation jumped 0.6% in January, the biggest increase in almost four years.
Another report showed that U.S. retail sales also outstripped expectations, increasing 0.4% last month.
The upbeat data came a day after Federal Reserve Chair Janet Yellen said in testimony to the U.S. Senate that the bank is on course to raise interest rates at one of its forthcoming meetings.
Yellen did not give any additional insight on the timing of the Fed’s next rate hike in her second day of testimony to Congress on Wednesday.
The dollar was weaker against the yen, with USD/JPY down 0.37% to 113.69, retreating further from Wednesday’s highs of 114.95, the most since January 27.
The euro pushed higher, with EUR/USD climbing 0.27% to 1.0628, rebounding from the five-week lows of 1.0520 set on Wednesday.
Sterling was also higher, with GBP/USD adding 0.24% to 1.2491.
Meanwhile, the Australian dollar was little changed, with AUD/USD at 0.7709.
Data overnight showed that while the Australian economy added more jobs than forecast in January all the increase was in part-time work, dampening the outlook for a recovery in wage growth and inflation.