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© Reuters. FILE PHOTO: U.S. dollar banknotes are seen in this illustration taken March 10, 2023. REUTERS/Dado Ruvic/Illustration/File Photo

By Harry Robertson and Brigid Riley

LONDON/TOKYO (Reuters) -The dollar held steady on Thursday as investors waited for data on U.S. retail sales and jobless claims, while the yen climbed despite the Japanese economy falling into a recession.

The , which measures the currency against six peers, was slightly lower at 104.6, just below a three-month high of 104.97 touched on Wednesday.

Retail sales data, due at 1330 GMT (8.30 a.m. ET), will provide more clues about the direction of the U.S. economy after inflation came in hotter than expected on Tuesday.

Tuesday’s price figures caused investors to rein in their expectations for Fed rate cuts, triggering a jump in bond yields and the dollar.

“Having been lifted by stronger job numbers and then higher price figures over recent weeks, the dollar direction today will be determined by the U.S. consumer,” said Chris Turner, global head of markets at ING.

“Barring a huge downside surprise in retail sales or a surge in initial jobless claims… we do not think the dollar has to come too much lower.”

The euro was slightly higher at $1.0736 while the pound slipped 0.11% to $1.2552 after data showed the UK economy edged into a recession in 2023.

The yen rose on Thursday, with the dollar down 0.37% at 150.05 yen despite Japan’s unexpectedly weak gross domestic product figures, which saw the country lose its title as the world’s third-largest economy.

It held under the three-month low of 150.88 touched on Tuesday, buoyed somewhat after Japan’s top currency officials warned against “rapid” yen moves the previous day.

Commonwealth Bank of Australia (OTC:) currency strategist Carol Kong saw the technical recession as having little impact on the yen, with the upcoming spring wage negotiations more important to the Bank of Japan’s (BOJ) policy outlook.

“Markets have continued to price a high chance of a BOJ rate hike in April despite the negative GDP print,” Kong said.

In cryptocurrencies, bitcoin ticked up 1.2% to $52,380. It rose as high as $52,555 in Asian trading, topping the 25-month high of $52,079 touched on Wednesday after the total value invested in bitcoin surpassed $1 trillion for the first time since November 2021.

On Thursday, investors saw a roughly 45% chance the Fed will cut rates by May, according to money market pricing. That’s down sharply from the start of February when a cut by then was seen as a certainty.

Australia’s dollar was up 0.12% at $0.65. The Swiss franc was around 0.3% stronger at 0.8829 francs to the dollar, after falling to a nine-week low earlier this week as inflation slowed.

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