In U.S. trading on Wednesday, EUR/USD was down 0.61% at 1.3456, up from a session low of 1.3446 and off from a high of 1.3578.
The pair was likely to find support at 1.3298, the low from Nov. 7, and resistance at 1.357, Tuesday's high.
The U.S. Commerce Department reported earlier that retail sales expanded 0.4% in October, blowing past expectations for a 0.1% gain after coming in flat the month earlier.
The data fueled optimism that the consumer-driven U.S. economy is on the mend and may keep the Federal Reserve on track to begin winding down stimulus measures in early 2014.
Stimulus programs such as the Fed's USD85 billion in monthly bond purchases aim to spur recovery by driving down long-term interest rates, weakening the dollar in the process.
Elsewhere, the Commerce Department reported that wholesale business inventories inched up by 0.6% in September compared to expectations for a 0.3% gain.
Weak data out of the housing sector failed to cap the dollar's advance in late-morning U.S. trading.
The National Association of Realtors reported earlier that existing home sales declined 3.2% to a seasonally adjusted 5.12 million units in October from 5.29 million in September.
Analysts had expected U.S. existing home sales to fall 2.6% to 5.13 million units last month.
Consumer price inflation figures largely met expectations, though they did take a backseat to U.S. retail sales data.
U.S. Department of Labor said the country's consumer price index fell by a seasonally adjusted 0.1% in October, defying expectations for a 0.1% increase after rising by 0.2% in September.
Year-over-year, the U.S. consumer price index rose at an annualized rate of 1.0% last month, in line with estimates and slowing from 1.2% in September.
The core consumer price index, which is stripped of volatile food and energy costs, inched up 0.1% in October, in line with forecasts. Core consumer prices rose 0.1% in September.
The U.S. core CPI increased at annualized rate of 1.7% last month, unchanged from September and in line with expectations.
Investors were eagerly awaiting the release of the minutes from the Fed's October policy meeting later in the day.
Fed Chairman Ben Bernanke on Tuesday reiterated the bank’s commitment to highly accommodative monetary policy on Tuesday and said the Fed would only taper its USD85 billion-a-month asset purchase program when it was assured of a sustained recovery in the labor market.
Interest rates will probably remain near zero for a “considerable time” after the bank winds up the stimulus program, he added.
Across the Atlantic, the euro weakened after Bloomberg reported that sources close to the ECB said the bank is to weigh a -0.1% deposit rate if more easing is required.
The ECB surprised investors after it unexpectedly cut rates to a record low 0.25% earlier this month amid concerns over mounting deflationary pressures in the euro area.
The single currency was down against the pound and down against the yen, with EUR/GBP trading down 0.75% at 0.8335 and EUR/JPY trading down 0.70% at 134.61.
On Thursday, the euro zone is to release preliminary data on manufacturing and service-sector activity.
The U.S. is release data on producer price inflation, as well as the weekly report on initial jobless claims. The U.S. is also to release data manufacturing activity from the Philly Fed.
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