By Sarah Turner, MarketWatch
SYDNEY (MarketWatch) — The dollar stuck to a tight range in Asian trading hours Wednesday, with investors cautious ahead of this week’s European summit.
The ICE dollar index DXY +0.05% which measures the greenback against a basket of six currencies, traded at 82.359, from 82.365 in late North American trading on Tuesday. Read more on Tuesday's currencies move.
“It has been a quiet session — foreign-exchange pairs have generally been stable, with the U.S. dollar modestly bid early in Asia before stabilizing,” said Michael Turner, strategist at RBC Capital Markets.
“This could be a reasonably long holding pattern until the headlines start to flow from the European Council’s heads of state summit tomorrow,” he said.
The European Union’s two-day meeting is slated to discuss the region’s evolving debt crisis.
Adding to this week’s raft of European developments, Egan-Jones Ratings lowered Germany’s sovereign rating from AA- to A+ and issued a negative watch on the rating on expectations the country will be left with significant uncollectable receivables due to its exposure to the euro zone.
The ratings agency said that Chancellor Angela Merkel is fighting a losing battle in resisting calls for EU bonds and pushing for fiscal controls until euro-area countries agree to broad oversight of their budgets
Tuesday also saw the release of a document outlining a path to tighter fiscal integration across the euro zone and a European banking union. Read more on Europe's plan for fiscal union.
The euro EURUSD -0.03% traded at $1.2501, little changed from Tuesday’s $1.2499 late trading level.
Against the Japanese yen, the U.S. dollar USDJPY +0.04% bought ÂĄ79.45, fractionally lower from ÂĄ79.48 late Tuesday.
The British pound GBPUSD -0.09% reached $1.5633, down from $1.5647.
Sarah Turner is MarketWatch's bureau chief in Sydney.
