U.S. Dollar Strengthens on Positive Retail Data

NEW YORK, Mar. 13 -- The U.S. dollar advanced against most of major currencies on Wednesday, boosted by better-than- expected U.S. retail sales data for February.

The U.S. Commerce Department Wednesday reported the combined retail and food services sales in February rose 1.1 percent from a month earlier, and the growth rate was the largest in five months, showing the country's consumer spending kept expanding.

As consumer spending accounts for 70 percent of U.S. economic activity, the upbeat retail sales data confirmed recovery of the world's largest economy and pushed up the dollar.

The euro weakened against the dollar for a second day after Italy's treasury auction results on Wednesday showed the country' s borrowing costs went higher.

Moreover, comments of Jens Weidmann, president of Germany's central bank and a member of the European Central Bank's policy- making body still weighed on the euro. He said on Tuesday that the euro-zone crisis is still not over despite the recent calm on financial markets.

The dollar retreated versus the yen in early trading but it pared losses due to positive U.S. retail sales data. Although the yen halted rising after Japan's main opposition Democratic Party decided to oppose one of the deputy governor nominees Kikuo Iwata for his radical policy view, analysts believe the yen is still likely to depreciate further against the dollar.

The nominee for the Bank of Japan governor Haruhiko Kuroda is expected to take the position this month and the BOJ's next policy meeting will be held on April 3 and April 4.

In late New York trading, the euro fell to 1.2961 dollars from 1.3026 dollars of the previous session and the British pound climbed to 1.4926 from 1.4910 dollars. The Australian dollar dropped to 1.0306 dollars from 1.0318 dollars.

The dollar bought 96.03 Japanese yen, higher than 95.91 in the previous session. It edged up to 0.9526 Swiss francs from 0.9472 and went up to 1.0273 Canadian dollars from 1.0262.