The dollar climbed to a seven-month high against a basket of currencies and a three-month peak against the euro on Wednesday as robust U.S. retail sales data bolstered prospects for the world's largest economy.
The greenback has risen nearly 4 percent against a currency basket and about 1.8 percent versus the euro so far this year. It has outperformed most major currencies in 2013.
The U.S. retail sales data was the latest evidence that the economy is firing on almost all cylinders. The Commerce Department said February retail sales increased 1.1 percent, the largest monthly rise since September.
"The growing dichotomy between the ever-improving U.S. economic picture and the moribund conditions in the euro zone has finally pushed the euro through the $1.2950 key support level against the dollar," said Boris Schlossberg, managing director of FX strategy at BK Asset Management in New York.
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The dollar index rose to 83.055, its highest since Aug. 3, before pulling back slightly to trade at 82.90, up 0.4 percent on the day.
Broad dollar strength pushed the euro down 0.5 percent on the day to $1.2966. The single currency had earlier hit a session low of $1.2922, the weakest since Dec. 10. It was the second straight losing day for the euro.