Dollar slips to 2-month low vs. euro

NEW YORK (CNNMoney.com) -- The dollar continues to slide this week as disappointing economic data cause investors to worry that the U.S. recovery is losing momentum.

While the dollar briefly pared losses Wednesday, after the latest Federal Reserve minutes showed additional measures may be taken to boost the U.S. economy, economic woes returned in full force Thursday, dragging the dollar lower.

The greenback dropped to a two-month low versus the euro and the British pound on Thursday, and it fell to the lowest level in nearly a year against the Japanese yen, according to Boris Schlossberg, director of currency research at GFT Forex.

Weak reports on retail sales, employment, manufacturing and inflation throughout the week have all pointed to a bumpy recovery.

"Economic data has hardly been robust and has not been U.S.-supportive," said Schlossberg. "For that reason, the dollar is really sinking against the euro, yen and pound."

As investors become even more jittery about economic growth in the U.S., the yen has been the main beneficiary, he said.

"The dollar-yen relationship is the most interesting, but the one that no one is talking about," he said. "U.S. interest rates have really come down on expectations that U.S. growth will be muted, and as a result, the dollar has substantially declined against the yen."

Meanwhile, the euro has gotten a boost as worries about the euro zone ease following strong demand at Spanish and Greek auctions this week.

"The solid results gave investors confidence that sovereign debt worries are evaporating," said Schlossberg.

While the dollar is typically viewed as a safe haven and flocked to during times of economic uncertainty, investors are shying away from the currency as they worry about the long-term outlook of the U.S. economy.

"What's happened is that fears about the euro's demise have gone away and then safe haven bid has gone with it," he said. "Now we're evaluating the U.S. economy purely on its fundamentals and the dollar really isn't looking attractive."