NEW YORK (AFP) - The dollar tumbled to an eight-month low against the euro after a weaker-than-expected reading on US consumer sentiment overshadowed other economic data, traders said.
The single European currency rose to 1.2468 dollars at 2100 GMT from 1.2382 late on Thursday in New York. The euro briefly broke past 1.25 dollars before retreating.
The dollar slipped to 109.36 yen against 109.63 on Thursday.
A University of Michigan survey showed US consumer sentiment sank to an 18-month low in early October, with the index slumping to 87.5 points from 94.2 in late September.
Further weakness was perceived in the Empire State manufacturing index, which fell to 17.4 in October from 27.3 a month earlier.
The currency markets focused on the downcast news, shrugging off a stronger-than-expected report showing retail sales up 1.5 percent in September.
"The catalyst for the move has been the stream of weaker data -- especially the more forward-looking numbers which suggest a weaker growth outlook," said Steve Pearson at HBOS.
Some investors said the sluggish economic news and surging oil prices will prompt the Federal Reserve to move to the sidelines faster than expected, without raising interest rates at the pace expected by markets.
"We think it truly boggles the mind that the market believes that there are nearly 85 percent odds of a Fed rate hike on November 10," said David Rosenberg at Merrill Lynch, who predicts the Fed will make one more quarter-point rate hike in November and then pause.
"Is the FOMC really that convinced in its view that we are fully out of the 'soft-patch?'"
In late New York trade, the dollar stood at 1.2337 Swiss francs from 1.2447.
The pound was at 1.8034 dollars from 1.7969 Thursday.