The US dollar got a boost on Tuesday after data showed retail sales in the US held up well in July, while a measure of business activity among New York state's manufacturers rose at its fastest pace in three years.
Retail sales in July, according to data from the US Census Bureau, were boosted by output from non-store retailers and by sales of building materials and garden supplies.
Headline retail sales in July were up 0.6%, beating the previous month's 0.3% gain and better than the forecast of 0.4% sales growth.
The weaker dollar ensured US retailers of overseas goods were not importing inflationary pressures, as the import price index rose at a monthly pace of 1.5% in July, the same as June's reading.
Excluding sales of automobiles, retail sales rose by 0.5% in July, up 0.1% in June, and beating expectations of a 0.3% rise.
"With consumer confidence at firm levels, employment continuing to rise and wages showing some evidence of picking up we remain optimistic on the prospects for consumer spending," said James Knightley chief international economist at ING.
Empire State survey
Released at the same time, the August survey of manufacturers in the New York Federal Reserve District – known as the Empire State survey – showed growing confidence in an area that encompasses all of NY state, much of New Jersey, Connecticut's Fairfield County, Puerto Rico and the US Virgin Islands.
The index of business activity rose to a three-year high of 25.2, a striking gain on July's 9.8 and well clear of the consensus estimate of 10.
Solid gains in new orders and shipments were largely responsible for the leap, while assessments of the six-month outlook showed much optimism about future conditions.
"The Empire State index is very volatile, but an unexpected jump to the highest level since September 2014 is nonetheless notable," said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
The dollar received support from the data and rose against its main rivals.
The dollar index, a measure of the greenback against a basket of six other currencies, rose 0.7% to a three-week high of 94.03.
Against the euro, the dollar gained 0.7% to $1.1698 and was 0.9% higher against the pound at $1.2851.