Forexpros - The U.S. dollar was broadly lower against the other major currencies on Tuesday, as risk appetite recovered following Monday’s stronger-than-expected U.S. retail sales data, but ongoing uncertainty over Spain and Greece kept gains in check.
During European morning trade, the dollar was lower against the euro, with EUR/USD up 0.38% to 1.2996.
Earlier Tuesday, official data showed that consumer price inflation in the euro zone slowed to 2.6% in September, down from a preliminary estimate of 2.7%.
Separately, the ZEW Centre for Economic Research said that its index of German economic sentiment improved to minus 11.5 in October from September’s reading of minus 18.2. Economists had forecast a reading of minus 15.0 this month.
Investors were looking ahead to Thursday’s European Union summit amid ongoing speculation over whether Spain will formally request a bailout from its euro zone partners in the coming weeks.
A bailout request would trigger a bond buying program by the European Central Bank, aimed at lowering peripheral euro zone borrowing costs.
On Monday, Greek government officials indicated that an agreement with international creditors on deficit reductions is unlikely to be reached before the summit.
The greenback was fractionally lower against the pound, with GBP/USD edging up 0.07% to 1.6081.
In the U.K., official data showed that the annualized rate of CPI dropped to 2.2% in September, the lowest since November 2009, down from 2.5% in August.
The slowdown in inflation will give the Bank of England more leeway to ease monetary policy further, in order to bolster growth in the recession hit economy.
Elsewhere, the greenback was higher against the yen, with USD/JPY up 0.29% to 78.86, but lost ground against the Swiss franc, with USD/CHF down 0.33% to 0.9300.
The greenback was mixed against its Canadian, Australian and New Zealand counterparts, with USD/CAD up 0.14% to trade at 0.9820, AUD/USD rising 0.15% to 1.0267 and NZD/USD down 0.57% to 0.8138.
The Australian dollar remained supported after the minutes of the Reserve Bank of Australia’s October meeting indicated that the bank sees scope for further rate cuts, as the outlook for growth was hit by a slowdown in the mining industry.
Meanwhile, official data showed that consumer inflation in New Zealand rose 0.3% in the third quarter, disappointing expectations for a 0.6% increase.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, slipped 0.17% to 79.64.
Later in the day, the U.S. was to release government data on consumer price inflation and industrial production.
