The dollar came back to life versus major rivals Thursday, rebounding near recent 7-year highs after strong U.S. retail sales data.
In a report that will likely lift economic growth forecasts for the fourth quarter, U.S. retail sales in November expanded at the fastest pace in eight months, rising 0.7 percent.
Economists were looking for a modest rise of 0.4 percent.
The dollar, stagnant since last Friday’s blockbuster jobs report, raced higher against the yen and made solid gains against the euro and sterling.
Prospects for further monetary stimulus in Europe and Asia are seen helping the dollar consolidate its gains for the next few weeks.
The buck jumped back above Y119 versus the yen, moving closer to last week’s 7-year peak near Y122.
Early gains took the buck to Y1.2370 versus the euro, about a penny from a recent 2-year high.
Subdued demand for longer-term loans at the European Central Bank’s second offering this month boosted the case for a full-blown quantitative easing.
Analysts say the ECB will need to act soon if it aims to meet its goal of boosting the balance sheet by EUR 1 trillion and avert the threat of deflation in the euro area.
There was little movement against the sterling, with the buck holding near $1.57.
In other economic news from the U.S., first-time claims for unemployment benefits edged slightly lower in the week ended December 6th, according to a report released by the Labor Department on Thursday.
The report said initial jobless claims dipped to 294,000, a decrease of 3,000 from the previous week’s unrevised level of 297,000. Economists had expected jobless claims to slip to 295,000.