The US Dollar fell to the lowest levels in four months against other major currencies. This happened due to weak economic reports published on Thursday. Investors expect the release of important data on the volume of retail sales and inflation in the US.

The Dollar came under pressure after the US Department of Labor released a report according to which the number of people in the US who applied for unemployment benefits rose unexpectedly to 261,000 last week against a forecast of a drop to 246,000. Another report showed that producer price index in December fell by 0.1% against growth forecasts of 0.2%.

Earlier, the dollar received support after the State Administration of China for Currency Control called media reports that Beijing is going to reduce or stop buying US government bonds based on an unreliable source of information or simply false.

On Wednesday, Bloomberg reported that the Chinese authorities recommended reducing or stopping the purchase of US government bonds during the review of assets in foreign currencies. China is the world’s largest holder of US Treasury bonds.

Dollar medium-term forecast remains bearish amid hawkish ECB stance and the need for further devaluation in order to spur consumer inflation in the US economy.

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