Investing.com - The dollar remained broadly supported close to 12 year highs against the other major currencies on Wednesday, despite the release of downbeat U.S. retail sales data as the ongoing drop in oil prices continued to support safe-haven demand.
In a report, the U.S. Commerce Department said that retail sales declined by 0.9% last month, worse than expectations for a drop of 0.1%. Retail sales growth for November was revised down to a 0.4% gain from a previously reported increase of 0.7%.
Core retail sales, which exclude automobile sales, slumped by 1.0% in December, disappointing forecasts for a 0.1% increase. Core sales in November rose by 0.1%, downwardly revised from a previously reported increase of 0.5%.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.24% at 92.21, still close to the 12-year peaks of 92.76 scaled last week.
Crude oil was hit after the World Bank cut its forecasts for global growth on Tuesday, adding to fears over the faltering economic recovery. Oil prices continued to tumble on Wednesday after falling to almost six year lows in the previous session, after OPEC said it will not cut output despite a global supply glut.
The rout in oil, which has halved in value in six months, has fuelled concerns of exacerbating already low levels of inflation in many major world economies.
EUR/USD was up 0.16% at 1.1791, not far from nine-year lows of 1.1727 hit earlier in the session.
The single currency weakened earlier, after the advocate general of the European Court of Justice, Pedro Cruz Villalon, advised judges to approve the ECB's Outright Monetary Transactions program, a measure which was launched in 2012.
Villalon said the ECB must avoid any "direct involvement in the financial assistance program that applies to the State concerned."
The ruling was seen as giving the ECB leeway at its upcoming policy meeting on January 22, when many expecte it to implement full blown QE measures.
Also Wednesday, data showed that euro zone industrial production rose 0.2% in November, in line with expectations, but factory output was down 0.4% on a year-over-year basis.
The dollar remained sharply lower against the safe-haven yen, with USD/JPY down 1.05% to 116.69, just off one-month lows of 116.27.
Elsewhere, the pound was higher, with GBP/USD up 0.37% to 1.5216, while USD/CHF slipped 0.15% to trade at 1.0186.
AUD/USD was down 0.23% to 0.8148 and NZD/USD was almost unchanged at 0.7733, while USD/CAD held steady at 1.1951, just below five-and-a-half year highs of 1.2017.