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Dollar on track for weekly loss

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Tariff, Russia-Ukraine optimism weighs on greenback

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US retail sales fall more than expected in January

(Updated in New York morning time)

By Karen Brettell

NEW YORK, Feb 14 (Reuters) - The dollar was on track for

a weekly loss on Friday as a delay in the introduction of trade

tariffs planned by U.S. President Donald Trump raised hopes that

they may not be as bad as feared, while hopes of a peace deal

between Russia and Ukraine helped the euro rally.

The dollar also fell to a nine-week low after data showed

that retail sales fell more than expected in January, leading

traders to raise bets that the Federal Reserve may cut rates two

times this year.

"Markets are still hoping that tariff headwinds are not

going to be as significant as perhaps previously feared, then

probably the bigger element this week is enthusiasm about

potential Russia-Ukraine ceasefire and to what extent that might

be positive for European growth in particular," said Vassili

Serebriakov, an FX strategist at UBS in New York.

"The retail sales are probably a tertiary factor, but it's

kept the dollar on the back foot," Serebriakov said.

The dollar index was last down 0.44% on the day

106.62 and on track for a weekly loss of 1.3%. It reached

106.56, the lowest since December 12.

The euro rose 0.42% to $1.0508 and got as high as

$1.0514, the highest since January 27. It is on pace for a

weekly gain of 1.7%.

The Japanese yen strengthened 0.37% against the

greenback to 152.24 per dollar.

Trump on Thursday tasked his economics team with devising

plans for reciprocal tariffs on every country that taxes U.S.

imports. Howard Lutnick, Trump's pick for commerce secretary,

said the administration would address each affected country one

by one and said studies on the issue would be completed by April

1.

The broad announcement appeared designed at least in part to

trigger talks with other countries, with a White House official

saying Trump would gladly lower tariffs if other countries

lowered theirs.

U.S. Treasury Secretary Scott Bessent also said on Friday

that the Trump administration is looking beyond tariffs and

non-tariff barriers to examine currency manipulation as it

studies the issue.

The euro and other European currencies have been supported

this week by optimism that Russia and Ukraine will reach a peace

deal.

U.S. Vice President JD Vance on Friday warned Russia that

Washington could hit Moscow with sanctions if it does not agree

to a good peace deal with Ukraine.

Trump discussed the war in Ukraine on Wednesday in phone

calls with Russian President Vladimir Putin and Ukrainian

President Volodymyr Zelenskiy.

Friday's retail sales data, meanwhile, comes after

Thursday's producer price report for January pointed towards

lower than previously thought core Personal Consumption

Expenditures Price Index later this month, which is the Fed's

preferred inflation measure.

Futures traders are now pricing in 40 basis points of cuts

for the year, fully reversing a move towards reduced rate cut

expectations after consumer price data came in hotter than

expected on Wednesday.

In cryptocurrencies, bitcoin gained 0.84% to

$97,314.08.

(Editing by Toby Chopra)