The dollar fell against most of its major counterparts as traders weighed whether weaker U.S. economic data will spur the Federal Reserve to consider a slower pace in tapering stimulus.

The British pound reached the highest since November 2009 after a report showed U.K. house prices rose the most since October 2012. The yen gained after Japan’s economic growth unexpectedly slowed. The Australian dollar touched a one-month high following data that showed record new credit last month in China, the South Pacific nation’s biggest trading partner. The Fed on Feb. 19 releases minutes of its most recent meeting.

“There’s a feeling in the market that the Fed might slow the pace of tapering, or even pause,” amid worsening U.S. economic data, said Toshiya Yamauchi, a senior analyst in Tokyo at Ueda Harlow Ltd., which provides margin-trading services. “Dollar weakness is set to continue.”

The dollar dropped 0.3 percent to $1.6792 per pound as of 6:55 a.m. in London from Feb. 14, after reaching $1.6823. It fell 0.2 percent to 101.60 yen, and declined 0.2 percent to $1.3716 per euro. The yen was little changed at 139.35 against the single currency.

The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 major peers, fell 0.1 percent to 1,016.19, after reaching 1,015.57, the lowest level since Dec. 18.

Markets in the U.S. will be closed for a holiday today.

Weather Effect

U.S. factory production unexpectedly declined in January by the most since May 2009, according to a report released on Feb. 14, adding to evidence severe winter weather is weighing on the economy.

Inclement weather was cited as a reason retail sales in the U.S. fell 0.4 percent in January after a revised 0.1 percent drop the prior month, according to a Feb. 13 Commerce Department report.

The Federal Open Market Committee said in January it will cut monthly bond purchases by $10 billion to $65 billion, citing labor-market indicators that “were mixed but on balance showed further improvement.” It bought $85 billion a month last year.

“The inclination is to punish the U.S. dollar after what is starting to be a pretty consistent run of poor U.S. data,” said Sean Callow, a Sydney-based currency strategist at Westpac Banking Corp. “People will start to wonder how long you can blame it on the snow.”

Pound Strengthens

The pound strengthened after Rightmove Plc said asking prices for U.K homes rose 3.3 percent this month from January, when they gained 1 percent.

“It adds to the stronger U.K. story,” Callow said. “You don’t have any obvious reason to sell the pound, aside from the fact that it’s probably getting a little stretched on the charts.”

Britain’s economy is improving so fast that futures prices show traders are bringing forward bets on when the central bank will raise interest rates, even as Bank of England Governor Mark Carney tries to damp speculation of higher borrowing costs. The BOE predicts gross domestic product will expand 3.4 percent this year, which would make the U.K. the fastest-growing economy in the developed world, based on analyst estimates compiled by Bloomberg.

The pound surged 1.6 percent in the past week, the most among 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar fell 1 percent, the biggest decliner. The euro weakened 0.5 percent, and the yen slipped 0.3 percent.

Japan’s gross domestic product expanded at an annualized 1 percent pace in the final three months of 2013, down from 1.1 percent growth in the preceding quarter, the Cabinet Office said today. The median estimate of analysts surveyed by Bloomberg News was for a 2.8 percent expansion.

Aussie Gains

“Japan’s recovery isn’t looking very solid, leading to a strong yen amid a rise in risk aversion,” said Daisaku Ueno, the Tokyo-based chief currency strategist at Mitsubishi UFJ Morgan Stanley Securities Co., a unit of Japan’s biggest financial group by market value.

Australia’s currency rose after the People’s Bank of China said in a Feb. 15 statement that aggregate financing, the broadest measure of credit, increased to an unprecedented 2.58 trillion yuan ($425.5 billion) in January.

“These numbers provide some confidence that growth is still ticking along, and are good for the Aussie, kiwi and emerging-market currencies,” said Ray Attrill, the global co-head of currency strategy at National Australia Bank in Sydney. “China is still a credit-driven economy.”

The Aussie gained 0.2 percent to 90.52 U.S. cents, after touching 90.69 U.S. cents, the most since Jan. 13. New Zealand’s kiwi added 0.1 percent to 83.68 U.S. cents.

Bloomberg