Forexpros – The U.S. dollar trimmed losses against almost all of the other major currencies on Tuesday, amid fresh concerns over the global outlook following weak data out of the euro zone, but market sentiment continued to be supported by hopes that world central banks will act to spur growth.
During European afternoon trade, the dollar was slightly lower against the euro, with EUR/USD rising 0.11% to 1.2343, off the session high of 1.2386.
Earlier Tuesday, official data showed that the euro zone economy contracted by 0.2% in the three months to June, in line with expectations, bringing the annualized rate of contraction to 0.4%.
Germany’s economy expanded by 0.3% in the second quarter, slightly better than expectations for 0.2% growth, while France’s economy stagnated, beating expectations for a 0.1% contraction.
Meanwhile, the ZEW Centre for Economic Research said that its index of German economic sentiment came in at minus 25.5 for August, the lowest level of 2012, down from July’s reading of minus 19.6 and defying expectations for a reading of minus 19.3.
The greenback was also lower against the pound, with GBP/USD up 0.09% to 1.5697, down from the session high of 1.5727.
The pound pushed higher against the greenback earlier, after official data showing that consumer inflation rose unexpectedly in July dampened expectations for near-term quantitative easing by the Bank of England.
The Office for National Statistics said the rate of consumer price inflation accelerated to a seasonally adjusted 2.6% in July from 2.4% the previous month. Analysts had expected CPI to ease slightly to 2.3%.
Elsewhere, the greenback was higher against the yen, but lower against the Swiss franc with USD/JPY adding 0.39% to trade at 78.61 and USD/CHF slipping 0.15% to trade at 0.9724.
The minutes of the Bank of Japan’s August meeting released earlier Tuesday indicated that policymakers have not ruled out further stimulus measures to bolster growth.
The greenback was fractionally lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD dipping 0.04% to 0.9921, AUD/USD edging up 0.08% to 1.0526 and NZD/USD inching up 0.05% to 0.8092.
Retail sales in New Zealand rose far more than expected in the second quarter official data showed earlier, climbing 1.5%, more than doubling expectations for a 0.7% increase.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.04% to 82.44.
Later Tuesday, the U.S. was to publish official data on retail sales and producer price inflation.
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