The dollar fell Friday against most major currencies except the yen as investors digested conflicting reports on retail sales and consumer confidence.
What prices are doing: The dollar was down 0.6% versus the euro to $1.3763. It also fell 0.6% against the British pound to $1.5152.
Against the Japanese yen, however, the dollar was unchanged at ¥90.45.
What's moving the market: The Commerce Department's monthly report on retail sales (http://money.cnn.com/2010/03/12/news/economy/retail_sales/index.htm) showed a 0.3% increase, following a 0.5% dip in January. That surprised economists who expected sales to fall 0.2% in February, according to Briefing.com.
The dollar initially rallied after the report was released. But the advance faded along with gains in U.S. stock markets (http://money.cnn.com/2010/03/12/news/economy/retail_sales/index.htm) following a surprise decline in a key index of consumer sentiment.
The Reuters/University of Michigan index of consumer sentiment fell to a reading of 72.5 in early March from 73.6 in the previous month. Economists had expected the index to climb to 74.
Also weighing on sentiment, government data showed January business inventories were flat, versus a forecasted 0.1% rise.
In addition, investors are looking ahead to next week's meeting of the Federal Reserve.
The U.S. central bank is expected to hold interest rates steady at historic lows near zero percent. But some analysts said recent comments from Fed officials suggest the central bank could alter its policy statement to reflect growing concerns about inflation.
What analysts are saying: "In this environment, there is likely to be increased expectations of a change in the Fed's language following next week's meeting," analysts at Sucden Financial Research wrote in a research report.
"This speculation should provide some support to the dollar, although buying will be limited by doubts whether interest rates will actually be increased in the short term," the report said.