The dollar held its ground on Thursday after a volatile two days that saw sharp declines followed by a rebound as traders took incoming economic data as signalling the Federal Reserve will wait longer before cutting interest rates.

The risk-sensitive Australian and New Zealand dollars sank amid a decline in regional equities.

The U.S. currency edged up to $1.08395 per euro and $1.2395 against sterling , while trading largely flat at 151.33 yen after mounting a recovery on Wednesday from its steepest declines against major peers in a year.

The dollar index - which measures the greenback against the euro, pound, yen and three other rivals - added 0.14% to 104.47. It gained 0.31% on Wednesday, following a 1.51% plunge the previous day.

The dollar drew support from better-than-expected retail sales numbers combined with more signs of a cooling of inflation, feeding into the narrative for an economic 'soft landing', which would allow the Fed more time before cutting rates.

Elsewhere, the Aussie slid 0.45% to $0.6480, and the New Zealand dollar declined 0.62% to $0.59855.

Australia's currency failed to draw support from a strong rebound in employment, as traders keyed on the fact that gains were mostly in part-time labour, while the jobless rate actually ticked higher.

Source : Reuters