The dollar slipped to another 2009 low against the euro Tuesday after a report suggested inflation is rising, while retail sales jumped in August by the largest amount in more than three years.
Strong recent economic data suggests the global slowdown is reaching an end, pushing investors to shun the safe haven of the dollar in favor of commodities and riskier currencies. Fears about inflation also tend to weigh on the dollar.
The British pound fell to $1.6490 from $1.6574, while the dollar slipped to 91.10 Japanese yen from 90.90 yen.
The dollar index has hovered near a 12-month low against a basket of major currencies over the past week in American trading. It fell as low as 76.4 - its lowest level since last September - against the basket, which includes the euro, yen, Canadian dollar, British pound, Swedish krona and Swiss franc, The Associated Press reports.
In late morning trade here, the euro fell to 1.4588 dollars from 1.4619 dollars in New York late on Monday.
Against the Japanese currency, the dollar rose to 91.09 yen from 90.92 yen on Monday.
Investors are increasingly confident that Germany's economy will rebound quickly from recession, a survey showed on Tuesday, providing some cheer less than two weeks before the country goes to the polls, AFP reports.