Investing.com - The dollar extended losses to hit a seven-month trough against other major currencies on Wednesday, hit by the release of disappointing U.S. data and as investors were eyeing the Federal Reserve’s highly-anticipated rate decision due later in the day.
EUR/USD gained 0.62% to 1.1278, just off a seven-month peak of 1.1296 hit earlier in the session.
The U.S. Commerce Department said retail sales fell 0.3% in May, compared to forecasts for a 0.1% rise.
Core retail sales, which exclude automobiles, decreased by 0.3% last month, disappointing expectations for an increase of 0.2%.
A separate report showed that the U.S. consumer price index fell by 0.1% last month, confounding forecasts for an increase of 0.1%. Year-over-year, consumer prices gained 1.9%, missing expectations for 2.0% rise.
Core consumer prices, which exclude food and energy costs, inched up by 0.1%, below forecasts for a 0.2% rise.
Later Wednesday, the Fed was widely expected to raise interest rates by 25 basis points from 1.00% to 1.25%.
Market participants were especially awaiting Fed Chair Janet Yellen’s comments following the decision for indications on the future pace of rate hikes.
Investors were also cautious as more than 190 Democratic lawmakers sued President Donald Trump accusing him of receiving funds from foreign governments through his firms and thus of violating the constitution.
GBP/USD added 0.13% to trade at 1.2769 after falling to session lows of 1.2724 when the U.K. Office for National Statistics said the claimant count increased by 7,300 in May, compared to expectations for a gain of 20,300 people.
The unemployment rate was unchanged at 4.6% in April, in line with expectations and at its lowest level since 1975.
The report also showed that the average earnings index rose by 2.1% in the three months to April, missing forecasts for a 2.4% increase. Excluding bonuses, wages rose by just 1.7%.
Meanwhile, political uncertainty persisted in the U.K., with Prime Minister Theresa May facing calls to soften her stance on Brexit days before negotiations on leaving the EU begin.
May was set to resume talks with Northern Ireland's Democratic Unionist Party (DUP) on a deal to secure their support in parliament after the Prime Minister failed to win an outright majority in last week's election.
USD/JPY tumbled 0.96% to 108.99, while USD/CHF slid 0.34% to trade at 0.9655.
The Australian and New Zealand dollars continued to climb, with AUD/USD up 1.18% at 0.7627 and with NZD/USD rallying 1.32% to 0.7317.
Meanwhile, USD/CAD edged down 0.12% to 1.3226, the lowest since February 27.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.53% at 96.46, the lowest since November 2016.