Investing.com - The dollar was higher against the other major currencies on Tuesday as recent signs of an economic improvement in the U.S. continued to lend support, while the euro was hovering close to nine month lows against the greenback.
Demand for the dollar continued to be underpinned after recent reports indicated that the U.S. economic recovery is on track. Lingering concerns over ongoing geopolitical risks stemming from Ukraine and the Middle East also supported investor demand for the greenback.
The euro came under heavy selling pressure after data on Tuesday showed that German investor sentiment deteriorated sharply this month.
EUR/USD touched session lows of 1.3336, not far from the nine month lows of 1.3332 struck last Wednesday and was last down 0.25% to 1.3348.
The Zew Institute said its index of economic sentiment fell to a 20-month low of 8.6 from 27.1 in July and was far short of forecasts of 18.2.
The ZEW said the decline in investor confidence was likely connected the impact of ongoing geopolitical tensions on the German economy and added that economic growth would be weaker than expected in 2014.
The euro zone, as well as Germany and France was to release data on second quarter growth on Thursday, as well as revised data on consumer prices, with a consensus forecasts for weak numbers.
Weak data on growth and inflation would add to pressure on the European Central Bank to implement fresh measures to shore up the recovery after it cut rates to record lows in June.
Elsewhere, sterling was little changed, with GBP/USD at 1.6790.
The dollar was steady against the yen at 102.22, while USD/CHF added 0.28% to trade at 0.9092.
The Australian dollar was steady, with AUD/USD supported at 0.9267. Earlier Tuesday data showed that Australian business confidence improved in July, and another report showed that house prices rose more strongly than expected in the second quarter.
NZD/USD was down 0.26% to 0.8435 and USD/CAD eased up 0.12% to 1.0934.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.18% to 81.66, not far from last week’s 11-month peaks of 81.78.