WASHINGTON (dpa-AFX) - The U.S. dollar recovered after a weak start on Tuesday, but stayed somewhat subdued post noon as optimism over the upcoming U.S.-China trade talks faded.
The dollar index, down by about 0.12% at 98.85 in morning trades, strengthened to 99.25 later on in the day, but pared gains as it eased to 99.13. However, it was still up in positive territory then, gaining 0.17% over previous close.
Against the euro, the dollar strengthened to 1.0958 from the day's low of 1.0997, netting a gain of about 0.14%.
Data from the Federal Statistical Office showed Germany's industrial production rose unexpectedly in August, after a slump in July. Production grew 0.3% month-on-month in August, defying expectations for a 0.2% fall. July's decline was revised to 0.4% from 0.6%.
However, industrial production decreased 4% year-on-year after a 3.9% fall in July.
Against pound sterling, the dollar firmed up to 1.2216 a sterling, after bring down at 1.2303 at one stage. Uncertainty over Brexit caused the sterling's retreat. According to reports, Brexit talks between Britain and the European Union were close to breaking down.
The Japanese Yen gained on safe-haven appeal, and was last seen hovering around 107.05, up 0.17% from previous close.
Data released by Japanese Ministry of Finance said Japan's current account surplus was 2,157.7 billion yen in August, up 18.3% on year. That beat expectations for a surplus of 2,100 billion yen and was up from the 1,999.9 billion yen surplus in July.
The trade balance reflected a surplus of 50.9 billion yen, beating forecasts for 36.4 billion following the 74.5 billion yen deficit in the previous month.
The dollar was up 0.1% against the loonie at 1.3322, and down 0.14% against Swiss franc, at 0.9934.
The Aussie was down marginally against the dollar, with the Aussie-dollar pair at 0.6731.
In U.S. economic news, producer prices unexpectedly decreased in the month of September, according to a report released by the Labor Department on Tuesday.
The report said its producer price index for final demand fell by 0.3% in September after inching up by 0.1% in August. The drop surprised economists, who had expected another 0.1% uptick.
Excluding food and energy prices, core producer prices also slid by 0.3% in September after climbing by 0.3% in August. Economists had expected core prices to rise by 0.2%.
The Federal Reserve Chairman Jerome Powell, speaking at the National Association of Business Economics annual meeting in Denver, said the bank intends to resume increasing the size of its balance sheet.
Powell said the Fed continues to see a sustained expansion of economic activity, strong labor market conditions and inflation near the symmetric 2% objective as most likely.
However, he noted there are risks to this favorable outlook due in part to uncertainties around trade, Brexit, and other issues.
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