The dollar held its ground against other major currencies n Tuesday, after the Federal Reserve held steady on interest rates but made a small acknowledgment that the economy is improving.
The Fed’s announcement followed a slew of economic data released this morning, including a positive report on retail sector during the start of the holiday shopping season.
The dollar came under early pressure against the euro, but firmed over the course of the day. The buck bounced back to $1.3375 from a 3-week low of $1.3497.
The buck also came off a three-week low near $1.5900 against the sterling, improving to $1.5775.
By Tuesday afternoon, the dollar snapped back to Y83.62 against the yen.
In economic news, the Fed kept interest rates at a record low near zero, but acknowledged that the rate of growth has been insufficient to bring down unemployment.
Additionally, the central bank reiterated that it plans to purchase $600 billion of longer-term Treasury securities by the end of the second quarter of 2011, a pace of about $75 billion per month.
In November, the Fed announced a second round quantitative easing through asset purchases, a move that critics have called unnecessary on the grounds it would weaken the dollar in support of an economic recovery already underway.
Earlier, the Commerce Department said retail sales in the U.S. increased by more than anticipated in the month of November.
Retail sales rose by 0.8 percent in November following an upwardly revised 1.7 percent increase in October.
And the Labor Department released a report on Tuesday showing that total producer prices for November increased by more than economists had been expecting.
Boosted by energy costs, producer prices increased by 0.8 percent in November after rising by 0.4 percent in each of the two previous months.
