The dollar nursed losses early on Thursday, having retreated across the board after a surprisingly big fall in U.S. retail sales pulled U.S. yields sharply lower.
Investors took some profits on long dollar positions as retail sales recorded their largest decline in 11 months in December. The disappointing data led the market to push out yet further the likely date for the Federal Reserve’s first interest rate hike, which many analysts had suspected could come in June.
Fed fund futures now have barely one move of 25 basis points priced in by year-end. Reflecting that uncertainty, the benchmark U.S. 10-year yield reached a 20-month trough of 1.784 percent, while the 30-year yield touched an all-time low of 2.395 percent.
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