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Dollar gains as Germany voices support for ECB move

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Shutterstock photo - - The dollar traded higher against most major currencies on Tuesday on news Germany's central bank would support a European Central Bank decision to implement fresh stimulus tools should the European economy merit such action.

In U.S. trading on Tuesday, EUR/USD was down 0.43% at 1.3698.

The Wall Street Journal reported the Germany's central bank would back monetary easing measures, including a negative rate on bank deposits and purchases of packaged bank loans, if such tools were needed to keep persistently low levels of inflation from becoming entrenched in the euro zone.

Last week, ECB President Mario Draghi said monetary authorities were "comfortable" with acting at its next meeting in June after reviewing the latest economic projections, and the euro fell on sentiments that European monetary policy is set to loosen, which bolstered the dollar's safe-haven appeal.

The single currency also came under pressure after data showed that German economic sentiment slumped to a 16-month low in May.

The ZEW Centre for Economic Research reported that its index of German economic sentiment dropped to 33.1 this month from 43.2 in April. Analysts had expected a reading of 41.0.

The current conditions index improved to 62.1 from 59.5 in April, ahead of expectations of 60.5.

Meanwhile in the U.S., investors shrugged off soft retail sales numbers, betting that data will disappoint from time to time but longer-term trends point to a more sustained U.S. recovery.

The Commerce Department reported earlier that U.S. retail sales rose just 0.1% in April, missing expectations for a 0.4% increase. Retail sales for March were revised up to a 1.5% gain from a previously reported increase of 1.2%.

Core retail sales, which exclude automobile sales, were flat in April, disappointing forecasts for a 0.6% increase. Core sales in March were revised up to a rise of 1% from a previously reported increase of 0.7%

The dollar was up against the yen, with USD/JPY up 0.16% at 102.29 and up against the Swiss franc, with USD/CHF up 0.30% at 0.8904.

The greenback was up against the pound, with GBP/USD down 0.26% at 1.6824.

The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.12% at 1.0908, AUD/USD down 0.07% at 0.9355 and NZD/USD up 0.14% at 0.8632, as data released earlier revealed that industrial production and retail sales in China slowed in April.

TheUS Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.32% at 80.21.

On Wednesday, the U.S. is to release data on producer price inflation. offers an extensive set of professional tools for the financial markets.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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