The dollar rose against other major currencies on Wednesday following an unexpectedly strong increase in U.S. retail sales last month.

Americans spent at the fastest pace in five months in February, lifting retail sales 1.1 percent, despite higher payroll taxes. The data was the latest in a series of positive U.S. economic reports, indicating a strengthening recovery.

The euro fell to $1.2961 Wednesday, versus $1.3026 late Tuesday. Earlier, the 17-nation currency dropped to a new low for the year against the dollar, hitting $1.2922. A relatively weak Italian bond auction helped push the euro lower, along with general concerns about the sluggish economies of Europe.

The British pound regained some of the ground it lost against the dollar earlier in the week. The pound was worth $1.4927, up from $1.4909 late Tuesday.

The dollar edged up to 96.04 Japanese yen from 95.93 yen late Tuesday. The yen has been weak because traders expect the new head of the Bank of Japan to ease monetary policy, but comments from opposition leaders appear to indicate his confirmation is not yet secured.

The dollar rose to 0.9526 Swiss franc from 0.9473 Swiss franc late Tuesday, and to 1.0272 Canadian dollar from 1.0261 Canadian dollar.