The FINANCIAL -- The dollar weakened against the yen and the euro on May 13 after U.S. retail sales data showed consumers wouldn't pull the economy out of its recent soft patch, according to Nasdaq.
The dollar fell 1.2% versus the common currency in late-afternoon trade, as one euro bought $1.1344, on pace for the highest close in a week.
The U.S. currency slid 0.6% against the yen, to Yen119.15, heading toward a two-week low.
The April retail sales numbers added to the raft of weak data that has pushed back market expectations for the Federal Reserve to raise interest rates, which has prompted investors to trim their bets that the dollar would make further gains this year.
Investors hoping that April data would show the U.S. economy has turned a corner must continue their wait, said Mark McCormick, currency strategist at Crédit Agricole.
"The dollar's move lower on the back of the retail sales numbers added to the general squeeze in dollar positions," Mr. McCormick said. "And now we have few significant U.S. data releases coming up over the near term that can arrest its decline."
Sales at retailers and restaurants last month remained unchanged from March at a seasonally adjusted $436.8 billion, the Commerce Department said, below economists' forecast of a 0.2% increase. A decline in car and gasoline purchases stood behind the flat reading for April; excluding autos, sales rose 0.1% last month, compared with expectations of a 0.5% increase. But March retail sales were revised to a 1.1% gain from a previously reported 0.9% increase.
The Fed has said that it will monitor U.S. data closely to determine when the economy has strengthened sufficiently to raise interest rates for the first time in nine years. Higher rates in the U.S. will make the dollar more attractive to yield-hungry investors.
Federal funds futures, which traders and investors use to wager on Fed policies, show that investors see a 52% chance of a rate increase in December and just 37% in October. That compares with a 56% probability in December and a 40% chance in October before the retail sales data, according to CME Group.