Investing.com - The dollar was trading in a narrow range against the other major currencies on Wednesday, following strong gains in the previous session as U.S. retail sales data boosted expectations that the Federal Reserve will soon start unwind its stimulus program.
During European morning trade, the dollar was almost unchanged against the yen, with USD/JPY edging up 0.02% to 98.19.
Demand for the dollar continued to be underpinned after U.S. retail sales data on Tuesday reinforced the view that the economic recovery is strong enough for the Fed to begin phasing out its USD85 billion-a-month asset purchase program later this year.
The Commerce Department said that retail sales rose for the fourth successive month in July, rising 0.2%, while core retail sales, which exclude automobile sales, rose at the fastest pace in seven months, climbing 0.5%.
Elsewhere, the dollar was steady against the euro, with EUR/USD inching up 0.02% to 1.3264.
In the euro zone, preliminary data released Wednesday showed that France’s economy expanded 0.5% in the three months to June, following two consecutive quarters of contraction. Economists had forecast growth of 0.2% quarter-on-quarter.
A separate report showed that Germany’s economy expanded by 0.7% after growing 0.1% in the first quarter. Economists had forecast quarter-on-quarter growth of 0.6%.
Brussels was to release preliminary data on euro zone gross domestic product later in the trading day, amid expectations that the report would show a modest return to growth.
The dollar was slightly higher against the pound, with GBP/USD slipping 0.08% to 1.5436.
Investors were looking ahead to U.K. employment data later in the session after the Bank of England announced plans last week to keep interest rates on hold at record lows as long as the U.K. unemployment rate remains above 7%.
The dollar gained ground against the Swiss franc, with USD/CHF climbing 0.29% to 0.9359.
The greenback was mixed against its Australian, New Zealand and Canadian counterparts, with AUD/USD dipping 0.06% to 0.9106, NZD/USD rising 0.43% to trade at 0.7998 and USD/CAD easing up 0.11% to 1.0354.
In New Zealand, official data on Tuesday showed that retail sales rose 1.7% in the second quarter, better than expectations for a 1.4% increase, while core retail sales rose by a larger-than-forecast 2.3%.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, edged up 0.06% to 81.83.
The U.S. was to release data on produce price inflation later in the day.
