Investing.com - The dollar remained at 12-year highs against the other major currencies on Tuesday, after the International Monetary Fund cut its forecast for global economic growth in 2015 and as tepid Chinese economic growth data failed to boost investor confidence
Global growth is projected at 3.5% for 2015 and 3.7% for 2016, the IMF said in its latest World Economic Outlook report, reducing its forecast by 0.3 percentage points for both years. However, the IMF raised its outlook for U.S. growth this year.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.27% to 93.10, close to Friday's 12-year peak of 93.56.
EUR/USD slipped 0.25% to 1.1575, not far from Friday's 11-year lows of 1.1459.
The euro showed little reaction to a report showing that the closely watched ZEW index of German economic sentiment rose to an 11-month high of 48.4 in January from 34.9 in December, ahead of forecasts of 40.0.
The report boosted hopes that Germany’s economy, the euro zone’s largest would rebound in 2015 after weakening at the end of last year.
The ZEW survey of euro zone economic sentiment increased to a six-month high of 45.2 from 31.8 in December, beating forecasts of 37.6.
Sentiment on the single currency remained vulnerable as investors waited to see if the ECB would embark on an outright quantitative easing program at its upcoming meeting on Thursday.
Uncertainty over the outcome of Greek elections, due to be held on Sunday, with anti-bailout party Syriza leading in the polls also weighed.
USD/JPY climbed 0.74% to a one-week high of 118.45. The safe-haven yen weakened after data on Tuesday showed that economic growth in China remained steady in the fourth quarter.
China’s economy expanded at an annual rate of 7.3% in the three months to December. Economists had expected growth in the world’s second-largest economy to slow to 7.2% from 7.3% in the third quarter.
On a quarter-over-quarter basis, China’s economy slowed to 1.5% from 1.9% in the third quarter, compared to forecasts for 1.7%.
Elsewhere, GBP/USD gained 0.48% to 1.5185, off nearly 18-month lows of 1.5058 hit overnight, while USD/CHF declined 0.55% to trade at 0.8746.
The commodity-linked currencies were broadly lower. AUD/USD retreated 0.51% to 0.8170 and NZD/USD tumbled 1.25% to two-week lows at 0.7684.
USD/CAD rallied 1.40% to trade at more than five-and-a-half year highs of 1.2110 after Statistics Canada reported that manufacturing sales dropped 1.4% in November, confounding expectations for a 0.5% slip. October's figure was revised to a 1.1% decline from a previously estimated 0.6% fall.