TOKYO, Nov 16 Reuters The dollar held its ground on Thursday after a volatile two days that saw sharp declines followed by a rebound as traders took incoming economic data as signalling the Federal Reserve will wait longer before cutting interest rates.

The risksensitive Australian and New Zealand dollars sank amid a decline in regional equities.

The U.S. currency edged up to 1.08395 per euro and 1.2395 against sterling , while trading largely flat at 151.33 yen after mounting a recovery on Wednesday from its steepest declines against major peers in a year.

The dollar index which measures the greenback against the euro, pound, yen and three other rivals added 0.14 to 104.47. It gained 0.31 on Wednesday, following a 1.51 plunge the previous day.

The dollar drew support from betterthanexpected retail sales numbers combined with more signs of a cooling of inflation, feeding into the narrative for an economic 39;soft landing39;, which would allow the Fed more time before cutting rates.

While inflation is falling, the economy remains robust, which might even allow the Fed to increase rates if they chose, said James Kniveton, senior corporate FX dealer at Convera, while noting there doesn39;t seem to be appetite for a hike among Fed officials currently.

Traders remain certain that rates will not go higher, but have trimmed the odds for a first reduction by March to less than 1in4 from better than 1in3 a day earlier, according to the CME Group39;s FedWatch Tool.

Ben…