The US dollar rose to near seven-week highs against the euro on Friday following a better-than-expected report on US retail sales, but failed to hold its gains amid a bout of profit-taking, traders said.
The dollar had spiked after the government announced US retail sales grew a stronger-than-expected 0.9 percent last month, defying most economists' forecasts which had anticipated a rise of just 0.7 percent.
The euro fell in earlier trading to US$1.2868, its lowest reading since Nov. 22, before clawing back some lost ground late on Friday as traders cashed in their dollar gains ahead of the weekend.
The euro was changing hands at US$1.2921 at 10pm GMT, up a shade compared with US$1.2892 late on Thursday in New York.
The US currency meanwhile was quoted at ?120.36, down from ?120.43 late on Thursday.
"US retail sales were very strong in the month of December, but after a week of solid gains it seems that there just weren't enough buyers out there to take the [US] currency even higher," said Kathy Lien, a chief strategist at Capital Forex Markets.
"This morning's retail sales report should have convinced any remaining dollar bulls sitting on the sidelines to join the party," Lien said.
The US Commerce Department report showed retail sales up 1 percent when excluding volatile automobile sales. That was double than the average analyst forecast of 0.5 percent.
"It appears that households had a merry holiday spending money, despite what the retailers may have been claiming," said Joel Naroff of Naroff Economic Advisors.
The yen climbed against the dollar, after Thursday's sharp falls, on mounting speculation that the Bank of Japan might raise interest rates next week.
In late New York trade, the greenback stood at 1.2471 Swiss francs from SF1.2492 on Thursday.
The British pound was changing hands at US$1.9587, compared with US$1.9442 a day earlier.
The US currency dropped against the New Taiwan dollar on the Taipei Forex Inc on Friday, losing NT$0.014 to close at NT$32.760.
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