* Euro dips, but dollar's struggles lend some support
* Dollar index hovers near lowest in nearly two weeks
* Recent weakness of U.S. data weighs on dollar
By Anirban Nag
LONDON, April 30 The euro fell on Tuesday, hurt
by slowing consumer demand in Germany, although losses are
likely to be limited by expectations the Federal Reserve's
ultra-loose policy will be maintained and weigh on the dollar.
German retail sales fell for the second month running in
March, confounding forecasts of a rise.
Coming a day after April inflation in the euro zone's
largest economy hit its lowest in more than two years, the
numbers bolstered expectations of a rate cut by the European
Central Bank on Thursday.
The euro was down 0.2 percent at $1.3070 with traders
citing offers layered above $1.3110 and $1.3150 and chart
resistance at its 100-day moving average of $1.3158. Near-term
support was at its 55-day moving average of $1.3044.
"The data is one factor why some investors are hoping for a
slightly more pro-active stance from the ECB," said Jeremy
Stretch, currency strategist at CIBC World Markets.
"If the ECB were to resort to a refinancing rate cut on
Thursday and announce non-standard measures to boost credit
flow, we could see a bounce in the euro. But anything above
$1.32 is a sell."
He added that dollar weakness was checking a sharper fall in
A slide in the two-year Treasury yield to a
nine-month low of 0.21 percent weighed on the U.S. currency.
The dollar index, which measures its value against a basket
of six major currencies, last traded at 82.212. It hit a
low of 82.035 hit on Monday, its lowest since April 17.
The Fed kicks off its two-day policy meeting on Tuesday and
investors are watching to see if a sluggish recovery and
slowing inflation could not only end talk of tapering its
bond-buying but push the central bank into buying more assets.
"The loss of cyclical momentum for the U.S. economy heading
into the second quarter and low inflation pressures are
resulting in the dollar giving back some of its gains," Lee
Hardman, currency analyst at Bank of Tokyo Mitsubishi, wrote in
The dollar was flat at 97.80 yen, having slipped to
97.35 yen on Monday, its lowest level in almost two weeks.