* Dollar broadly lower early in Asia, euro back at $ 1.0650
* U.S. retail sales miss market expectations
* China data including GDP next in focus
By Ian Chua
SYDNEY, April 15 (Reuters) – The dollar nursed broad losses early on Wednesday, having snapped six straight sessions of gains after retail sales data failed to meet the market’s lofty expectations.
The dollar index slid 0.7 percent, posting its biggest one-day fall in nearly two weeks as Treasury yields sank. The two-year yield touched a low of 0.500 percent, pulling away from Monday’s high of 0.576 percent.
U.S. retail sales rose 0.9 percent in March, just undershooting the consensus forecast of a 1.0 percent gain, while core sales were much softer.
Yet, the relatively outsized market reaction suggested dollar bulls were getting frustrated with the recent string of unimpressive data, which could bolster the case for the Federal Reserve to delay any hikes in interest rates.
The data dealt a fresh blow to the dollar index, which had appeared to be back on track to test a 12-year high of 100.390 set last month. It climbed as high as 99.990 on Monday.
“The U.S. data over the rest of this week will become increasingly important, further misses will likely drive more sustained losses for the USD,” analysts at ANZ wrote in a note to clients.
Renewed weakness in the greenback helped the euro climb as far as $ 1.0708 and off Monday’s trough around $ 1.0520. It has since moderated its gains to last stand at $ 1.0651.
Against the yen, the dollar sank as deep as 119.07, well off a recent high of 120.84. It was at 119.39 in early Asian trade.
The euro managed to recover a bit of ground against the yen, having slumped to a near two-year low of 126.08 on Tuesday. It last stood at 127.19.
Investors cut short yen positions early this week after comments from a key economic adviser to Japan’s Prime Minister were taken to mean the currency was too weak.
Yet Koichi Hamada has since told Reuters in an interview that he thought the yen was fairly valued around current levels.
Trading in Asia on Wednesday hinges on a batch of Chinese data due around 0100 GMT. China’s annual economic growth is expected to have slowed to a six-year low of 7 percent in the first quarter.
Any disappointment in the numbers could hit risk appetite, which would normally give the safe-haven yen a bit of a boost.
The immediate fortunes of the Australian and New Zealand dollars will also depend on the outcome of the Chinese numbers.
The Aussie popped above 76 U.S. cents overnight on the broad slide in the greenback, but could easily reverse and test a six-year trough of $ 0.7534 set two weeks ago.
- retail sales