Dollar strengthens despite discomfiting data, record oil

The 15-nation euro fell to $1.5480 in late New York trading from $1.5540 late Monday. The British pound declined to $1.9459 from $1.9566.

The dollar also climbed to 105.26 Japanese yen, up from 104.17 yen late Monday.

The U.S. Commerce Department reported Tuesday that retail sales fell 0.2 percent in April, as expected by economists. But excluding sales of automobiles, the sales rose 0.5 percent, which was better than expected.

"The euro is pressured by strong core U.S. sales despite the decline in U.S. retail sales," Ashraf Laidi, chief currency strategist at CMC Markets USA, wrote in a research note.

The Commerce Department also said business inventories rose only 0.1 percent in March, the smallest growth in a year and below economists' estimates.

Oil and gas prices also continued to hit new records, compounding worldwide inflationary worries.

A weak dollar helps drive up oil prices, which are priced in the American denomination.

Federal Reserve Chairman Ben Bernanke, speaking at a conference on Tuesday, said that turmoil in financial markets has eased somewhat, but the situation is still "far from normal." He did not discuss the Fed's next interest rate move, however.

The Fed has lowered its rates seven times in seven months to 2 percent, a major factor in the dollar's sag against the euro. But many investors expect that the Fed is done easing for the near future.