(RTTNews) - The U.S. dollar showed weakness against other major currencies on Wednesday as gains in Asian and European stocks prompted traders to reduce holdings of lower-yielding greenback.
Asian and European stocks rose today after the U.S. markets closed well off their lows overnight on the back of better-than-expected ISM non-manufacturing PMI data.
Australia's encouraging second quarter GDP data and talks of monetary easing in China also cheered investors.
China Securities Journal wrote in a commentary that the central bank may loosen monetary policy by a "certain amount" in coming months as inflation cools.
Adding to traders risk sentiment, Greece said it would accelerate austerity measures in return for international financing.
Meanwhile, the European Commission welcomed the additional austerity measures unveiled by the Italian government to meet the agreed targets of deficit and debt reduction and called for rapid adoption of the measures announced on retirement age.
The US dollar slipped to 0.8307 against the NZ dollar, compared to yesterday's close of 0.8226. On the downside, 0.839 is seen as the next target level for the greenback.
The US dollar declined to a 2-day low of 1.0635 against the Australian dollar. The next downside target level for the greenback is seen at 1.077. At yesterday's close, the aussie-greenback pair was quoted at 1.0488.
The Australian Bureau of Statistics said that the second quarter gross domestic product increased 1.2 percent, beating forecasts for a 1 percent growth.
For the full year through the second quarter, GDP was up 1.4 percent. This was also outnumbered estimates of a 0.7 percent advance.
The US dollar that closed yesterday's trading at 0.9905 against the Canadian dollar fell to a 2-day low of 0.9854. If the greenback weakens further, it will test support around the 0.980 level.
Against the euro, the dollar edged down to 1.4149, compared to yesterday's closing value of 1.3997. On the downside, 1.428 is seen as the next target level for the dollar.
The euro was supported in the early European session after the top German court has rejected suits regarding the euro rescue funds.
The Karlsruhe-based Federal Constitutional Court rejected lawsuits aimed at blocking Germany's participation in resource measures for troubled members in Eurozone.
The country's highest court also said the parliament must have a greater say in future bailout decisions. In the ruling, Chief Justice Andreas Vosskuhle directed the government to seek the approval of the parliament's budget committee for aid guarantees.
