The US dollar remained firm against the majors in New York as traders reacted to the mixed US economic data.
US retail sales grew at a slower pace of 0.4 percent in February, printing below expectations of 0.8 percent. US consumers continued to spend as the economy added more jobs and tax refunds boosted disposable income. The Empire State manufacturing rose to 19.6 in March, up from 19.2 in February and printing above expectations of 19.4 as manufacturers increased production to keep up with rising consumer demand.
The biggest surprise was the release of the US Net Foreign Securities purchases (TICS), which printed at $91.5 billion, much stronger than market consensus of $58.5 billion. The positive TICS data revealed that foreign investors are willing to fund the gap created by the Current and Trade deficits that is believed to responsible for the dollar's weakness against the majors.
With the Trade Deficit and TICS data printing mixed results, markets are looking forward to the Current Account data, scheduled to be released later this week.
The US dollar was quoted at 1.3308-11 against the euro, 1.9131-36 versus the pound and 104.49-53 against the Japanese yen at 10:45 GMT.
Wall Street headed for a lower close as strong economic data was outweighed by the high oil prices and terrorism concerns.
Stocks headed lower after the report from Washington D.C. that samples taken from the Defense Department mail center tested positive for anthrax spores.
The Dow Jones Industrial Average was down 0.6 percent to 10,745.10. The Standard and Poor's 500 index eased 0.8 percent to 1,197.75 and the NASDAQ Composite lost 0.8 percent to 2,034.98.
Lehman Brothers shares rose 3.1 percent to $96.19 after the financial services company reported a rise in first-quarter earnings.
Rayovac shares rallied 9.5 percent to $45 after buying Tetra, a reptile and fish care products company in a bid to expand its product line beyond batteries and razors.
Genentech lost 1.4 percent to $54.25 as investors took profits following yesterday's spectacular rally after the biotech company announced positive clinical trial results of its cancer drug.
Protein Design Labs gained 5.2 percent to $17.27 after the biotech company reported better than expected earnings.