Dollar Slides Amid Economic Data and Central Bank Moves

The U.S. dollar declined against key currencies following mixed economic signals. Slower U.S. growth and rising inflation, coupled with ECB interest rate cuts, were significant factors. The dollar's performance against the yen, franc, euro, and sterling showed varied results. Tariff concerns and AI developments were secondary market influences.

The U.S. dollar experienced a decline against major currencies on Thursday after economic data indicated slower-than-anticipated growth. The Commerce Department reported a 2.3% annualized growth rate for the U.S. economy in Q4, underperforming analysts' forecasts amid subdued business spending.

Inflation showed a slight rise, with the PCE price index up 2.5%. Meanwhile, the European Central Bank cut its interest rates by 25 basis points, maintaining openness for further reductions as economic concerns outweigh inflationary pressures. The dollar weakened against the yen and strengthened slightly against the Swiss franc and euro.

Market analysts forecast additional ECB rate cuts, and global tariff discussions shifted investor focus. The Canadian and Mexican currencies appreciated against the dollar amid ongoing trade discussions, while the potential impact of tariffs and technological advancements like artificial intelligence remained significant themes.

(With inputs from agencies.)