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U.S. dollar keeps upward trend against yen, euro

The U.S. dollar continued rising against major currencies on Tuesday amid signs that the U.S. economy is improving and speculations that the Federal Reserve may unwind its large-scale monetary easing program.

The dollar was underpinned by better-than-expected retail sales data released on Monday as consumption accounts for approximately 70 percent of U.S. economic growth.

The advance estimates of U.S. retail and food services sales for April unexpectedly increased 0.1 percent, following a 0.5 percent drop in March, the Commerce Department reported Monday.

The figure indicated consumers' demand remained solid and eased worries that the federal government's tax hikes may have exerted negative pressure on the world's largest economy.

Moreover, while both the Bank of Japan (BOJ) and the European Central Bank have expanded monetary easing measures recently, Federal Reserve officials have reportedly been debating if it should wind down its bond-buying program, which also benefited the dollar.

After rising for four consecutive days, the dollar-yen rate broke through the level of 102 on Tuesday and reached the highest level in more than four years.

The yen has been slipping sharply against the greenback since the BOJ decided to purchase 1.4 trillion dollars of bonds in the next two years on April 4 to reach a 2-percent inflation target and fight against a two-decade long deflation.

More on the economic front, the U.S. Labor Department said Tuesday that U.S. import prices fell 0.5 percent in April, which indicated that inflation pressure has weakened in the country and also supported the dollar.

In late New York trading, the euro fell to 1.2937 dollars from 1.2970 dollars of the previous session and the British pound dropped to 1.5221 dollars from 1.5290 dollars. The Australian dollar slipped to 0.9878 dollars from 0.9953 dollars.

The dollar bought 102.3 Japanese yen, higher than 101.93 yen of the previous session. It edged up to 0.9658 Swiss francs from 0. 9585 Swiss francs and went up to 1.0178 Canadian dollars from 1. 0108 Canadian dollars of the previous trading day.

[Source: Xinhua, New York, 14May13]

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