- The dollar touched session highs against the yen on Tuesday after data showed that U.S. retail sales rose more strongly than expected in December, bolstering the outlook for the economy going into 2014.

USD/JPY hit highs of 103.78 and was last up 0.64% to 103.64.

The Commerce Department said U.S. retail sales rose 0.2% last month, beating expectations for a 0.1% increase.

Core retail sales, which exclude automobile sales, climbed 0.7% in December, above forecasts for a 0.4% increase.

The data helped bolster expectations that the economic recovery in the U.S. will continue to deepen in the coming year.

The dollar was almost unchanged against the euro, with EUR/USD dipping 0.01% to 1.3671.

The euro came off session lows against the dollar earlier after European Central Bank Governing Council member Ewald Nowotny said there was a potential upside to the ECB’s growth forecast for this year. The ECB revised its growth forecast for 2014 slightly higher in December, saying it now expects growth of 1.1%

Meanwhile, data released on Tuesday showed that industrial production in the euro zone rose more-than-expected in November, easing concerns over the outlook for growth.

The dollar was higher against the pound, with GBP/USD rising 0.20% to 1.6414.

In the U.K., data on Tuesday showed that the annual rate of consumer inflation rose 2.0% in December, slowing from 2.1% in November. It was the first time since 2009 that the U.K. inflation rate was in line with the Bank of England’s official target of 2%.

The dollar extended gains against the Swiss franc, with USD/CHF up 0.32% to 0.9019.

The Australian dollar retreated from Monday’s one-month highs, with AUD/USD down 0.65% to 0.8994, while NZD/USD was up 0.45% to 0.8413.

The kiwi was boosted after the New Zealand Institute of Economic Research said Tuesday its business confidence index rose to a 20-year high of 52 in the fourth quarter, from a reading of 38 in the three months to September.

Elsewhere, USD/CAD was up 0.38% to 1.0901, not far from the four year highs of 1.0944 struck on Friday.

The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, edged up 0.09% to 80.69.

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