Euro strengthens as eurozone growth picks up

Tokyo - The euro ticked up on Thursday on the back of an improving eurozone economy, while a disappointing US retail sales report put pressure on the dollar.

Despite upbeat European growth, however, debt-saddled Greece confirmed that its economy had slipped back into recession, with no end in sight to tense bailout reform talks with its international creditors.

In Tokyo, the euro bought $1.1367 and ¥135.41 against $1.1354 and ¥135.29 in New York, and well up from $1.1246 and ¥134.80 earlier on Wednesday in Asia.

The single currency climbed on news that growth in the eurozone strengthened to 0.4% in the first quarter, from 0.3% in the last three months of 2014. Some of that momentum came after the European Central Bank (ECB) launched a massive bond-buying programme in March to fight tepid growth and deflationary risks in the currency bloc.

The dollar eased to ¥119.10 from ¥119.16 in New York and ¥119.83 in Tokyo earlier on Wednesday.

A closely watched US retail sales, a key part of consumer spending that drives most of the US economy, stagnated in April after rising 1.1% in March. The average consensus estimate was for a 0.2% increase. Year-on-year, retail sales rose 0.9%, the weakest growth since 2009.

The data will muddy the waters for the Federal Reserve as it considers when to raise interest rates from record lows.

"There's no way to put lipstick on a pig really, it was disappointing," Richard Franulovich, a currency strategist at Westpac Banking Corp., told Bloomberg News.

"Whatever bounceback we see I think is going to underwhelm, ergo I think more dollar weakness is the order of the day."

The dollar was weaker against other Asia-Pacific currencies.

It fell to Sg$1.3216 from Sg$1.3349 on Wednesday, to 33.37 Thai baht from 33.69 baht, and to 44.54 Philippine pesos from 44.73 pesos.

It also eased to 13 070.00 Indonesian rupiah from 13 164.00 rupiah, to Tw$30.54 from Tw$30.69, to 1 091.95 South Korean won from 1 99.71 won, and to 63.85 Indian rupees from 64.15 rupees.

The Australian dollar climbed to 81.35 US cents from 79.82c while the Chinese yuan fell to ¥19.20 from ¥19.32.