Weak US foreign capital Inflows takes a toll on the greenback

The greenback suffered significant losses against the international majors as the eagerly awaited US capital inflows data release indicated a decline – foreign capital inflows into the US plunged 31% in December to $61.3 billion from the upwardly revised figure of $89.3 billion in the previous month.
Traders took that as more than adequate reason to dump the dollar and euro soared past the 1.30 mark while sterling rocketed to 1.8950 notwithstanding the fact that capital flows is well above the $56 billion December trade deficit.
An unexpected drop of 0.3% in the December US retail sales added further woes to the greenback.
The single European currency touched as high of 1.3052 in the late New York trade before settling around the 1.3020 mark.
Exploiting the broad based dollar weakness and further assisted by positive fundamental data (steady CPI reading of 1.6% and an optimistic RICS housing data) cable surged to a 6-week peak of 1.8979.
The Japanese Yen accelerated its gains to as high as 104.39 as the Japanese purchases of US treasuries fell 0.4% in December following a marginal increase in November and two successive declines in the prior months.