The dollar fell against a basket of major currencies on Friday, after retail sales data unexpectedly undershot expectations in August while sterling rose to its highest since June last year adding to downside momentum in the greenback.
The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, fell by 0.25% to 91.80.
A sluggish month for motor vehicle sales weighed on retail sales growth in August, suggesting that consumer spending in the third-quarter may come under pressure, tapering investor expectation of strong third-quarter economic growth.
The Commerce Department said on Friday retail sales dipped 0.2% last month, missing expectations of a 0.1% rise.
The soft retail sales data came just hours ahead of manufacturing and consumer sentiment that topped forecasts.
The New York Empire State Manufacturing Survey declined to 24.4 for September from 25.2 previously, although this was significantly above consensus expectations of 19.0.
After hitting seven month highs in August, the consumer sentiment index, a survey of consumers by The University of Michigan, fell to 95.3 in September but handily topped expectations.
Sterling, meanwhile, added to gains from the previous session, hitting its highest level since the Brexit vote, piling further pressure on the greenback after Bank of England committee member Gertjan Vlieghe said the "moment is approaching" for a rate increase.
GBP/USD rose to $1.3571, up 1.29%, while USD/CAD gained 0.36% to C$1.2209.
EUR/USD added 0.13% to $1.1935 while EUR/GBP slumped 1.12% to £0.8796.
USD/JPY rose 0.54% to Y110.85, as safe-haven demand eased following an earlier spike in geopolitical uncertainty after North Korea launch a missile over Japan on Friday.