Dollar index remains lower on disappointing U.S. data

The dollar remained lower against the other major currencies on Thursday, as weak U.S. retail sales and jobless claims data continued to weigh, although ongoing concerns over the Greek debt crisis still lent some support to the safe-haven greenback.

In a report, the U.S. Commerce Department said that retail sales declined by 0.8% last month, worse than expectations for a drop of 0.5%. Retail sales fell by 0.9% in December.

Core retail sales, which exclude automobile sales, slumped 0.9% in December, disappointing forecasts for a 0.4% decline. Core sales in November dropped 0.9%, upwardly revised from a previously reported fall of 1.0%.

Separately, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending February 7 increased by 25,000 to 304,000 from the previous week’s revised total of 279,000.

Analysts had expected initial jobless claims to rise by 6,000 to 285,000 last week.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.76% to 94.44.

EUR/USD gained 0.37% to 1.1377. The euro had weakened earlier, as talks between Greece and European Union officials ended without an agreement on Wednesday, though both sides said there was still hope for a deal. Further talks are due to be held next Monday.

Greece’s current bailout is due to expire on February 28 and the new Greek government does not want it extended, fuelling fears over a conflict with its creditors which could trigger the country’s exit from the euro zone.

The pound was near more than one-month highs against the dollar, with GBP/USD up 0.76% to 1.5350 after the Bank of England said inflation is likely to fall to zero in the first half of this year, but added that there was no threat of deflation taking hold in the U.K.

In addition, the bank said it would now consider cutting interest rates below 0.5% if inflation dips more deeply into negative territory than expected.

Elsewhere, USD/JPY tumbled 1.10% to trade at 119.12, while USD/CHF held steady at 0.9287.

The Australian and New Zealand dollars were mixed, with AUD/USD slipping 0.11% to 0.7708 and NZD/USD up 0.46% to 0.7401.

The Aussie came under pressure earlier, after the Australian Bureau of Statistics said the number of employed people dropped by 12,200 in January, compared to expectations for a 5,000 fall, while Australia's unemployment rate rose to 6.4% last month from 6.1% in December.

Meanwhile, the Canadian dollar extended earlier gains, with USD/CAD down 1.18% to 1.2483.

Forex - Australia dollar down sharply on weak jobs data, Greece talks

The Australian dollar fell sharply on disappointing jobs data Thursday that underlined a fragile view on economic recovery and continued turmoil in Greece bailout talks.

Australia's January labor force survey showed unemployment up to 6.4%, higher than the 6.2% expected and 12.200 jobs lost compared to 5,000 seen and participation rate unchanged at 64.8%.

AUD/USD traded at 0.7664, down 0.67%, while USD/JPY changed hands at 120.20, down 0.20%, on safe-haven demand and mixed data on machinery orders and company earnings.

Earlier the euro dipped after talks between Greece and its European partners failed to reach agreement on a way forward to allow the debt-laden country to get a needed funding program in place before the end of the month.

EUR/USD traded at 1.134, down 0.19%, after nearly seven hours of talks.

"We did make a lot of progress in the sense that we now understand better where we all are," Eurogroup president Jeroen Dijsselbloem said at a press conference in Brussels. "But there was simply not enough to come to joint conclusions and that is the requirement to produce a statement."

The talks between European finance ministers that ran into Thursday morning meant that the Eurogroup failed to produce a joint statement on the outcome of the meeting.

Negotiations will now move towards next Monday when there is another Eurogroup meeting in Brussels. Dijsselbloem said.

In Australia, Reserve Bank Assistant Governor Guy Debelle is due to speak at a FX Week conference in Sydney.

Also in Australia, MI inflation expectations showed a mean view of 2.6%, compared to 2.4% in January, an unexpected rise following drop in headline CPI in the fourth quarter.

In Japan, December machinery orders rose 8.3%, well above the 2.7% gain expected and January CGPI rose 0.3%, less than the 1.1% on year expected, but still the 22nd straight year-on-year rise.

Overnight, the dollar pushed higher against the other major currencies on Wednesday, as sentiment waned amid mounting concerns over whether Greece will reach a compromise deal with creditors to extend its bailout program.

Greece’s current bailout is due to expire on February 28 and the new Greek government does not want it extended, fuelling concerns that a conflict with international creditors could trigger the country’s exit from the euro zone.

Athens was expected to ask for a bridge loan to cover its funding needs until September, and to also propose new economic reforms to replace 30% of its massive bailout deal.

Prime Minister Alexis Tsipras's government won a confidence vote on Tuesday evening and reiterated that he will deliver on pre-election pledges to roll back austerity measures and reject an international bailout extension.

The yen weakened slightly after Bank of Japan Governor Haruhiko Kuroda said the Group of 20 nations didn't criticize his bank's monetary easing program, indicating confidence to continue on the path of monetary stimulus.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was quoted at 94.92, down 0.26%.