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Dollar plunges after weak U.S. data signal delayed Fed rate hike

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The U.S. dollar hit a three-week low against the euro and a more than one-month low against the yen on Wednesday after weak U.S. economic data on retail sales and producer prices heightened concerns that the Federal Reserve would delay its first rate hike.

Commerce Department data showed U.S. retail sales dropped 0.3 percent in September, while the Labor Department said prices received by U.S. producers fell 0.1 percent in September, the first decline in more than a year.

The data bolstered traders' views that the U.S. Fed would hold off on raising rates from rock-bottom levels. A rate hike is expected to boost the dollar by driving investment flows into the United States.


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Brent crude hit a four-year low of $83.37 on Wednesday.

Analysts said the weak U.S. data had turned traders' focus back to the United States after worrying economic figures from Europe and the United Kingdom weighed on the euro and British sterling Tuesday.

Data showing China's consumer inflation slowed more than expected in September to a nearly five-year low also underscored signs of disinflation worldwide.

The euro was last up 1 percent against the dollar at $1.2783, just below a three-week high of $1.2885 hit earlier in the session. The dollar was last down 1 percent against the yen at 106.03 yen after hitting a more than one-month low of 105.21 yen earlier in the session.

The dollar was last down 0.91 percent against the Swiss franc at 0.9448 franc after hitting a three-week low of 0.9361 franc earlier in the session. The dollar index, which measures the greenback against a basket of six major currencies, was last down 0.75 percent at 85.181.

U.S. 30-year Treasuries yields fell to a session low of 2.673 percent, a level last seen in September 2012, while the benchmark Standard & Poor's 500 stock index was last down 1.36 percent.

—By Reuters with CNBC.

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