U.S. Dollar Near Three Month Lows

The U.S. dollar huddled near three-month lows on Thursday after poor retail data proved a huge disappointment to those expecting a strong economic rebound from a weather-weakened first quarter.  Investors reacted by pushing back the likely lift-off date for a rate hike by the Federal Reserve, giving gold a steer to five-week highs above $1,218 an ounce XAU=.

Yet in a bizarre turn, German and U.S. bond yields still surged to their highest in over five months as a vicious selloff extended to its tenth session.  “Global rates markets have seemingly nowhere to hide,” said Bill O’Donnell, head of Treasury strategy at RBS. “Rates flows illustrated that the resolve of sellers is still unyielding.”

The startling rise in yields has made equities look more expensive in comparison to debt and kept Asian share markets subdued. Japan’s Nikkei .N225 eased 0.4 percent early Thursday, as did Australian stocks .AXJO.  MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was virtually flat.