RTTN:Dollar On Defense Despite Lack Of Clarity On Europe Rescue Fund
(RTTNews) - The dollar remained under pressure versus the euro on Wednesday, amid conflicting reports about the size of an expanded bailout intended to prevent a full-blown euro zone debt crisis.
A report in Dow Jones said yesterday's Guardian report that Germany and France agreed to a 2 trillion euro package was "totally false."
The lending capacity of the European Financial Stability Facility will be raised to a maximum of 1 trillion euros, Financial Times Deutschland quoted German Finance Minister Wolfgang Schaeuble as saying on Tuesday.
Meanwhile, Moody's Investor Service lowered Spanish government rating by two notches on Tuesday, citing the economy's continued vulnerability to market stress and elevated funding risks.
The move comes after Fitch's downgrade earlier this month and a similar action from Standard and Poor's last week.
Still, the dollar remained in the doldrums amid concerns about U.S. economic growth and the potential for more quantitative easing from the Federal Reserve.
The buck eased to $1.3850 versus the euro, after bouncing around $1.3750 earlier in the week.
Early losses took the dollar to $1.5810 versus the sterling, and to within one cent of parity at C$1.01 versus Canada's loonie.
Policy makers of the Bank of England unanimously decided to expand quantitative easing by GBP 75 billion to GBP 275 billion in October, minutes of the meeting released by the Bank of England showed Wednesday.
There was little movement near Y76.80 versus the yen, with the dollar unable to sustain any upward momentum for months.
A report on housing starts and building permits is slated to be released at 8:30 am ET. Economists estimate housing starts of 590,000 for September, while building permits are expected at 620,000.
The consumer price index for September is scheduled to be released at 8:30 am ET. Economists expect the headline index to rise by 0.3 percent and the core producer price index to show a 0.2 percent increase.
