NEW YORK, July 14, 2010 (AFP) – The dollar fell slightly against the euro Wednesday amid weak data and as the Federal Reserve downgraded its US growth projection for this year.

"Currency traders dumped the dollar today after a weaker than expected retail sales report and renewed pessimism from the Fed," said Kathy Lien of Global Forex Trading.

The euro fetched 1.2743 dollars in New York at 2215 GMT, up from 1.2724 dollars late on Tuesday.

The day started badly for the greenback as demand softened on news that US retail sales fell more than expected in June for a second straight month.

Sales declined 0.5 percent from May to 360.2 billion dollars, pulled down by sharp declines in autos, gasoline and building materials, according to the Commerce Department.

The ill feeling about the US economy only continued when the US central bank warned growth will slow to 3.0 to 3.5 percent this year, down from the 3.2 to 3.7 predicted just months ago.

That also sent the dollar lower against the Japanese currency, fetching 88.27 yen versus 88.68 yen the day before.

"If the Fed is not optimistic... it will be difficult for investors to be optimistic and therefore the dollar is vulnerable to additional weakness against the Japanese Yen as well as the other major currencies," said Lien.

Against other key currencies, the dollar fell to 1.0517 Swiss francs versus 1.0548 francs on Tuesday, while the British pound rose to 1.5268 dollars from 1.5180 dollars.