Investing.com - Upbeat European economic indicators including a robust retail sales report sent investors chasing the euro and other risk-on currencies, which weakened the dollar against most major currencies on Tuesday.
In U.S. trading on Tuesday, EUR/USD was up 0.40% at 1.3930.
In Europe, Eurostat, the European Union's statistical arm, reported that retail sales rose 0.3% in March, defying expectations for a 0.2% contraction. Retail sales in February were revised down to a 0.1% gain from a previously estimated 0.4% increase.
The numbers sparked for demand for the euro as did upbeat Spanish jobless numbers.
Official data released earlier revealed that the number of unemployed people in Spain dropped by 111,600 in April, compared to expectations for a decline of 49,100, after a 16,600 fall the previous month.
Separately, the Markit Economics research group said that Spain's services purchasing managers' index rose to a six-year high of 56.5 last month, from a reading of 54.0 in March. Analysts had expected the index to tick up to 54.4 in April.
Italy's services PMI swung back into expansion territory last month, rising to 51.1 from a reading of 49.5 in March, beating expectations for an uptick to 50.4.
The euro zone's service-sector PMI came in unchanged at 53.1, in line with expectations.
Meanwhile in the U.S., data revealed that the country's trade deficit narrowed to $40.38 billion in March from $41.87 billion in February, whose figure was revised from a previously estimated deficit of $42.30 billion. Analysts had expected the trade deficit to narrow to $40.30 billion in March, and the lackluster data softened the dollar.
The dollar was down against the yen, with USD/JPY down 0.49% at 102.64 and down against the Swiss franc, with USD/CHF down 0.42% at 0.8741.
The greenback was down against the pound, with GBP/USD up 0.67% at 1.6981.
Sterling soared after Markit said the U.K. services PMI rose to a four-month high of 58.7 last month from 57.6 in March. Analysts had expected the index to remain unchanged in April.
The upbeat data added to expectations the Bank of England could raise borrowing costs ahead of other central banks.
The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.70% at 1.0878, AUD/USD up 0.90% at 0.9356 and NZD/USD up 0.86% at 0.8753.
In Canada, the Ivey PMI ticked down to 54.1 in April from 55.2 the previous month, better than expectations for a decline to 54.0.
A separate report showed that the trade surplus narrowed to C$0.08 billion in March, from C$0.85 billion in February, whose figure was revised up from a previously estimated surplus of C$0.29 billion. Analysts had expected the trade surplus to narrow to C$0.40 billion in March.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.50% at 79.15.