The euro nursed losses against the dollar early on Wednesday, dragged down after the benchmark German bond yield turned negative for the first time as markets braced for the Federal Reserve's policy decision amid heightened worries over Brexit.
The euro was little changed at $1.1210 EUR= after sliding 0.8 percent overnight to an 11-day low of$1.1189.
Concerns about Britain opting to leave the European Union in a referendum next week continued to influence the mood in global markets. Germany's 10-year bund yield DE10YT=TWEB turned negative for the first time on Tuesday after a series of polls showed a big lead for the "leave" camp. [GVD/EUR]
The dollar was little changed at 106.03 yen JPY=, having pulled back from an overnight low of 105.63. A drop below 105.55 would take the greenback to its lowest level since October 2014.
U.S. retail sales rose strongly in May as Americans bought automobiles and a range of other goods, even as they paid more for gasoline, suggesting that economic growth was gaining steam despite a sharp slowdown in job creation.
Other data on Tuesday hinted at a steady build-up of inflation pressures, with import prices recording their largest increase in just over four years in May as the drag from a strong dollar and lower oil prices fades.
The Commerce Department said retail sales increased 0.5 percent last month after surging by an unrevised 1.3 percent in April. The second straight month of gains boosted sales 2.5 percent from a year ago. Excluding automobiles, gasoline, building materials and food services, retail sales rose a solid 0.4 percent last month after an upwardly revised 1.0 percent increase in April.
In a separate report, the Labor Department said import prices increased 1.4 percent last month, the largest rise since March 2012, after advancing 0.7 percent in April. In the 12 months through May, import prices fell 5.0 percent, the smallest decline since November 2014.
Oil prices fell about 2 percent in extended trading on Tuesday as data showed a surprise build in U.S. crude inventories last week, adding to the market's nervousness around Britain's vote next week on whether to leave the European Union.
Data from the American Petroleum Institute (API) showed U.S. crude inventories rose by 1.2 million barrels in the week to June 10 to 536.7 million, compared with analysts' expectations for a decrease of 2.3 million barrels. [API/S]
Prices ended the session lower for the fourth straight day with Brent down 52 cents at $49.83 a barrel, while U.S. crude closed 39 cents lower at $48.49. Gasoline futures RBc1 touched a more than one-month low of $1.50 a gallon during the session.
Reference: Reuters
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