Investing.com - The U.S. dollar traded higher against its counterparts Tuesday, on solid U.S. retail sales and anticipation of the Federal Reserve’s rate statement later in the session.
During U.S. afternoon trade, the dollar was higher against the euro, with EUR/USD down 0.32% to hit 1.3113
The greenback gained strength after the Commerce Department stated that U.S. retail sales increased by a seasonally adjusted 1.1% last month, hitting 5 month highs in February.
Core retail sales, which exclude automobile sales, rose by 0.9% in February, above expectations for a 0.8% gain.
The information decreased expectations for a fresh round of monetary stimulus by the Fed, after data on Friday showed that the U.S. economy added more jobs than forecast last month.
The euro failed to gain traction off a report by the ZEW Centre for Economic Research, which showed that its index of German economic sentiment advanced to the highest level since June 2010 in March, climbing to 22.3, against expectations for a reading of 10.5.
Elsewhere Tuesday, Spain agreed to demands from euro zone finance ministers that it cut its budget deficit target for this year to 5.3% of gross domestic product instead of its original 5.8% target.
The greenback was down against the pound, with GBP/USD advancing 0.58% to hit 1.5734.
The pound found support after official data earlier showed that total U.K. exports to non-EU countries advanced to a record high in January, increasing hopes that the economy is recovering.
The Office for National Statistics said the goods trade deficit expanded to GBP7.53 billion in January, slightly less than forecasts for GBP7.88 billion and up from GBP7.18 billion the previous month, which had been the lowest since December 2009.
The greenback was trading close to an 11-month high against the yen, with USD/JPY up 0.54% to hit 82.67 and was up against the Swiss franc, with USD/CHF adding 0.35% to hit 0.9196.
Earlier in the day, the Bank of Japan kept interest rates unchanged in a range of zero to 0.1%, in a widely expected decision. The central bank left the size of its asset purchase fund unchanged at JPY30 trillion, after unexpectedly boosting the program in February, weakening the yen.
In Switzerland, official data showed that producer price inflation rose more-than-expected in February, climbing 0.8%.
Elsewhere, the greenback was weaker against its Canadian, Australian and New Zealand cousins, with USD/CAD sliding 0.29% to hit 0.9896, AUD/USD rising 0.24% to hit 1.0539 and NZD/USD climbing 0.58% to hit 0.8227.
Sentiment on the Australian dollar had been lowered earlier upon official data indicating that home loan approvals fell more-than-expected in January, while a separate report showed that Australian business confidence fell to the lowest level in four months in January.
Meanwhile, the New Zealand dollar found support after official data showed that food price inflation rose more-than-expected in February, while house sales rose sharply.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.18% to hit 80.43.
The Fed was to announce its benchmark interest rate later in the day; the announcement was to be accompanied by the central bank’s rate statement.