The greenback recovered from earlier session lows against the majors at the start of Tuesday trading, pushing the euro off from above the 1.40-level to 1.3940 and the pound beneath the 1.63-figure.

US economic reports released earlier in the session were mixed, with both retail sales and producer prices higher than expected for June. The headline retail sales figure edged up by 0.6% and beating estimates for a decline to 0.4% from 0.5% in May. The excluding autos reading missed forecasts for an unchanged number at 0.5%, instead declining to 0.3%. The June producer price index was sharply higher than expected, posting a monthly increase of 1.8%, compared with consensus estimates for an increase to 0.9% from 0.2% and lower by 4.6% on an annualized basis versus a 5.0% decline previously. The core PPI figures revealed a monthly increase of 0.5%, versus a 0.1% decline a month earlier and a 3.3% jump on an annualized basis compared with 3.0% a year prior.

Although the highly anticipated earnings report from Goldman Sachs beat consensus estimates, the equity market had largely priced in strong earnings and drifted into negative territory at the open. The Dow Jones, Nasdaq and the S&P 500 were lower by nearly 0.4%. Declining equities pushed the dollar off its session lows, recovering from the 1.40-level to 1.3950 against the euro. Crude oil continued to hover near the $60 per barrel level.

The calendar on Wednesday consists of June CPI, real earnings, industrial production, and the July NY Fed manufacturing survey. Industrial production in June is expected to post a slight improvement from a 1.1% decline in May, declining by 0.6%, while the July NY Fed manufacturing

Euro Backs Away from 1.40

The euro traded above the 1.40-level to 1.4014 but quickly eased back toward the 1.3950-level, dragged lower by the equity bourses dipping into negative territory. The economic data released overnight saw the Eurozone industrial production report improve in May, up 0.5% versus a 1.9% decline a month earlier and decline by 17.0% compared with a 21.6% drop a year earlier. Meanwhile, Germany's July ZEW sentiment survey was worst than expected, with the current conditions index at -89.3 compared with -89.7 previously and the economic sentiment lower to 39.5 from 44.8 in June.

EURUSD was little changed, with support beginning at 1.3930 followed by 1.39 and 1.3860. Subsequent floors are eyed at 1.3840, backed by 1.38 and 1.3750. On the upside, resistance is seen at 1.40, followed by 1.4040 and 1.4070. Additional ceilings will emerge at 1.41, backed by 1.4130 and 1.42.