By Tommy Wilkes
LONDON (Reuters) – The dollar hit a new 2 1/2-month high on Tuesday, supported by worries about an escalation of the Sino-U.S. trade war and more signs the United States economy is outperforming rivals, while weak euro zone growth knocked the single currency lower.
Data showed that the euro zone grew less than expected in the third quarter and economic confidence continued to fall, sending the euro to a day’s low.
The headwinds for the euro, which include a standoff between the European Union and Rome over Italy’s rules-breaking budget, come just as demand for the dollar rebounds.
“Trade wars, a recovery on equity markets and poor data out of Europe and stronger data in the U.S.” were supporting the dollar at the euro’s expense, said Niels Christensen, chief analyst at Nordea.