NEW YORK (MarketWatch) -- The dollar gave up small gains versus the euro and the Japanese yen Tuesday, as currency traders eyed U.S. equity markets' reactions to corporate earnings news.
The dollar had advanced earlier in the session after a pair of U.S. reports said retail sales and wholesale prices rose more than forecast in June.
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The euro (CUR_EURUSD 1.40, -.00, -0.19%) fell to $1.3975, from $1.3995 in late North American trading Monday.
The dollar traded at 92.97 yen, from 92.91 yen on Monday.
The dollar index (DXY 80.10, -0.03, -0.03%) , a measure of the greenback against a trade-weighted basket of six major rivals, recently traded at 80.004, compared to 80.024 in the previous session.
Sales at retail stores rose 0.6% last month, the most in five months, largely due to auto sales and gasoline, according to the Commerce Department. That topped expectations for a 0.5% increase, according to a MarketWatch survey of analysts. Excluding automobiles, sales rose 0.3%, while Wall Street expected a 0.7% increase. See more on retail sales.
"While retail sales growth in May and June was certainly welcome, it is unlikely to prompt any change to the US outlook," said Michael Woolfolk, senior currency strategist at The Bank of New York Mellon. "The U.S. dollar has room to rally on rising risk aversion and falling stock prices."
Separately, producer prices rose 1.8% in June, the most since November 2007 and more than the 1.2% expected. Excluding food and energy, so-called core prices increased 0.5%, the Labor Department said. See more on PPI.
Major currency pairs have remained largely range-bound in recent sessions. The dollar weakened in U.S. trade Monday as equity markets improved, sapping some of the greenback's safe-haven appeal.
U.S. stock markets gave up gains Tuesday after Goldman Sachs (GS 150.47, +1.03, +0.69%) and Johnson & Johnson (JNJ 58.24, +0.52, +0.90%) posted better-than-expected earnings for the quarter ended in June. The Standard & Poor's 500 Index (SPX 902.09, +1.04, +0.12%) recently traded down 0.1%.
So the dollar may stand to gain strength more on the weakness in equities than the apparent strength in the economic data.
"The U.S. reports created more cause for concern than relief," said Kathy Lien, director of currency research at Global Forex Trading. "The primary reason why both reports beat expectations was due to the 10% increase in oil prices last month, and unfortunately higher energy prices hurt more than they help the U.S. consumer."
Euro, sterling
Weighing on the euro earlier, the German ZEW economic sentiment index posted an unexpected decline in July, while May euro-zone industrial production saw a smaller-than-expected rise. See full story.
Meanwhile, sterling bulls were encouraged by data from the Royal Institution of Chartered Surveyors, said strategists at Brown Brothers Harriman. The June RICS monthly house price index posted a stronger-than-expected rise to -18.1% from -43.8% in May. See full story.
June annual U.K. consumer inflation slowed to a 1.8% rate, the Office for National Statistics said, dipping below the BOE's 2% target for the first time since September 2007 but providing little surprise. See full story.
The British pound fetched $1.6292, up from $1.6231 on Monday.
