The U.S. dollar edged lower against major currencies on Friday as risk appetite recovered across markets, after Federal Reserve officials helped calm concerns about a quick tightening of policy in response to accelerating U.S. inflation.
The greenback, seen as a safe haven in times of market volatility, was down a third of a percent against a basket of currencies, retracing some of its earlier gains on Wednesday after data showed a surprise surge in consumer prices.
Treasury yields slid on Friday after U.S. retail sales unexpectedly stalled in April as the boost from government stimulus checks faded and bond investors heeded the Federal Reserve's view that a jump in inflation will be temporary.
The yield on benchmark 10-year U.S. Treasury notes fell 4 basis points to 1.628%.
The unchanged reading in retail sales last month followed a 10.7% surge in March, an upward revision from the previously reported 9.7% increase, the Commerce Department said.
US Dollar Index relevant levels
Now, the index is losing 0.17% at 90.56 and faces the next support at 89.98 (monthly low May 11) followed by 89.68 (monthly low Feb.25) and then 89.20 (2021 low Jan.6). On the other hand, a breakout of 90.90 (weekly high May 11) would open the door to 91.07 (100-day SMA) and finally 91.43 (weekly/monthly high May 5).
Reference: CNBC, Reuters, FXStreet
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