Investing.com - The dollar rose to session highs against the euro and remained broadly stronger against the other major currencies on Wednesday as Tuesday’s stronger U.S. consumer spending data bolstered the outlook for the economic recovery.
EUR/USD hit session lows of 1.3605, the weakest since January 10 and was last down 0.49% to 1.3610.
Demand for the dollar continued to be underpinned after data on Tuesday showed that U.S. retail sales rose by a modest 0.2% in December, while core retail sales, which exclude auto sales, rose by a larger than forecast 0.7%.
The data indicated that the economic recovery is likely to continue to deepen going into this year and offset concerns over last week’s surprising poor U.S. nonfarm payrolls report.
The common currency shrugged off a report showing that the euro zone’s trade surplus widened to EUR16.0 billion in November from a surplus of EUR14.3 billion in October, due to a decline in imports.
Elsewhere, Germany’s Federal Statistics Office said Wednesday the economy expanded by just 0.4% in 2013 after increasing by 0.7% in 2012, as the crisis in the euro zone acted as a drag on growth. Analysts had been expecting growth of 0.5%.
USD/JPY hit highs of 104.48, the strongest since January 10 and was last up 0.05% to 104.25. On Tuesday the pair rallied 1.1%, recovering from a one-month low of 102.84 struck on Monday.
The dollar gained ground against the pound and the Swiss franc, with GBP/USD sliding 0.23% to 1.6399, and USD/CHF advancing 0.58% to 0.9077.
The Swiss franc showed little reaction after data released on Wednesday showed that Swiss retail sales jumped 4.2% on a year -over-year basis in November, outstripping expectations for a 1.6% increase.
The Australian dollar extended its pullback from Monday’s one-month highs, with AUD/USD down 0.55% to 0.8914, while NZD/USD lost 0.27% to trade at 0.8358.
Elsewhere, USD/CAD was up 0.07% to 1.0956, after rising as high as 1.0992 earlier, the strongest level since September 2009. The Canadian dollar remained under heavy selling pressure after dire Canadian employment data last week cemented expectations that the Bank of Canada will stick to its dovish stance on interest rates.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.40% to 81.05.
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