Continuing weaker data from Germany and banking concerns from Portugal saw the euro weaken against the dollar on Tuesday, as US central banking chief Janet Yellen was slightly more optimistic on the economy.Germany's ZEW index of investor and analyst expectations, which aims to predict economic developments six months ahead, made its sixth consecutive fall, slipping to 27.1 in July from 29.8 in June. Economists had predicted a drop to 28.2 as the eurozone's largest and strongest economy looks like slowing down.The EUR/USD was down 0.39% on the day.Going the other way, the GBP/USD was up 0.31% as the heads of central banks in both the UK and US gave their regular testimonies to politicians. Also in the UK, inflation was revealed to have risen more than forecast in June, closer towards the Bank of England's 2% target. The consumer price index advanced 1.9% in the year to June, jumping up from 1.5% in May and surprising analysts who had expected a 1.6% increase.Against the euro, sterling profit taking was the dominant influence in early trading, with Sucden Financial noting a very sharp reversal following the release of the inflation rate.Yellen's comments also helped the USD/JPY rise 13%. The Bank of Japan has said the over-strong yen had been corrected, but, says Sucden, underlying confidence in Japanese fundamentals remained very weak with expectations that yield considerations would lead to increased capital outflows. "The Chinese GDP data was marginally stronger than expected which cushioned risk conditions and Asian equity markets posted small gains which curved yen demand."OH