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Forex - Dollar gains on firming U.S. retail sales, soft European data

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Shutterstock photo - The dollar rose against most major currencies on Wednesday after retails sales in the U.S. came in stronger than expected last month and stirred up already growing expectations that the Fed will soon consider winding down monetary stimulus measures.

In U.S. trading on Tuesday, EUR/USD was down 0.56% at 1.2961.

The Commerce Department reported earlier that U.S. monthly retail sales jumped 1.1% in February, beating expectations for a 0.5% increase.

Core retail sales, which are stripped of automobiles, gasoline and building materials, rose by 1.0% compared to expectations for a 0.2% gain.

The numbers fueled already growing expectations for the Federal Reserve to start considering exit strategies for its monetary stimulus programs that weaken the greenback by design to spur recovery.

The retail sales figures came just days after the Bureau of Labor Statistics reported that the U.S. economy added 236,000 nonfarm payrolls in February, way more than an expected 160,000 increase.

The headline unemployment rate fell to 7.7% in February from 7.9% in January, beating analysts' calls for the rate to remain unchanged.

Elsewhere, official data revealed that the eurozone's industrial output fell 0.4% in January, outpacing market calls for a 0.1% decline.

Meanwhile in Italy, the country's Treasury sold EUR3.32 billion in three-year government bonds at an average yield of 2.48%, up from 2.30% at a similar auction last month, which weakened the euro.

The auction was the first since Fitch Ratings slapped a one-notch downgrade on Italy earlier this month.

The greenback, meanwhile, was down against the pound, with GBP/USD trading up 0.12% at 1.4920.

The dollar softened against the yen, with USD/JPY trading down 0.08% at 96.00, and up against the Swiss franc, with USD/CHF trading up 0.59% at 0.9528.

The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.20% at 1.0276, AUD/USD down 0.17% at 1.0306 and NZD/USD trading down 0.23% at 0.8249.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.43% at 83.17.

On Thursday, the U.S. is to release government data on producer price inflation, a leading indicator of price stability, and the weekly government report on initial jobless claims. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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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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