Investing.com - The dollar extended gains against the other major currencies on Tuesday, helped by the release of upbeat U.S. retail sales data and as market sentiment continued to prove amid easing tensions between the U.S. and North Korea.
The greenback strengthened further after data showed that U.S. retail sales rose at a faster than expected rate in July, brightening the outlook for economic growth in the third quarter.
A separate report showed that the Empire State manufacturing index climbed to 25.20 in August from 9.80 the previous month, blowing past expectations for a reading of 10.00. It was the highest level since September 2014.
The dollar also remained supported after New York Federal Reserve President William Dudley said on Monday that he favored another interest rate hike this year if the economic conditions evolved in line with his expectations.
USD/JPY rallied 0.98% to 110.73, the highest since August 8, while USD/CHF rose 0.34% to 0.9746.
Demand for the safe-haven yen and Swissie weakened after North Korea said on Tuesday it had delayed a decision on a plan to fire missiles at the U.S. Pacific territory of Guam while it watches U.S. actions a little longer.
At the same time, South Korean President Moon Jae-in said there will be no military action upon the Korean peninsula without Seoul's consent and that the government would prevent war by all means.
Elsewhere, EUR/USD slid 0.67% to 1.1698, while GBP/USD retreated 0.84% to 1.2857 after data showed that Britain’s annual inflation rate unexpectedly held steady in July.
In the euro zone, official data showed that German gross domestic product rose 0.6% in the second quarter, disappointing expectations for an increase of 0.7%. Year-over-year, Germany’s economy grew 0.8% in the last quarter, less than the expected growth rate of 1.9%.
The Australian and New Zealand dollars were weaker, with AUD/USD down 0.48% at 0.7814 and with NZD/USD shedding 0.47% to 0.7253.
Meanwhile, USD/CAD gained 0.37% to trade at a one-month high of 1.2770.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.22% at 93.55, the highest since July 26.