The dollar was higher against all the major currencies on Wednesday as demand for equity assets helped offset bearish U.S. economic data, placing the greenback at its highest level in 10 days against the euro and back above 109.00 versus the yen.
The rally in global equities -- including a near 200 point gain in the Dow -- was triggered by a greater-than-expected increase in Chinese exports that stifled the flight-to-safety into the yen. USD/JPY was already through 109.00 by the North American open, and continued to grind higher until running into resistance at 109.40. The challenge to this level coincided with soft retail sales and another contraction in producer prices. The dollar retreated but found strong support at 109.00, and then again at 109.20, allowing USD/JPY to close with a 0.40% gain at 109.30.
The euro was also on the defensive, made worse by an above consensus drop in EU industrial production and breach of 1.140 support on Tuesday. It didn't take much effort to push the euro below 1.130 or its major hourly moving averages despite soft U.S. data. Although EUR/USD briefly traded below the next key level of support at 1.1277, it eventually wedged itself just above 1.128, limiting its losses against the dollar to 0.70%.
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Source → Daily Forex Wrap: Dollar Regains Momentum on Stock Market Gains
