(RTTNews) - The dollar remained under modest pressure on Wednesday, giving back a fraction of its recent gains amid fundamental concerns about U.S. economy.
Traders seem to feel the dollar may have been overbought in recent weeks, as Europe's worsening sovereign debt problems have overshadowed lingering economic weakness in the U.S.
A downgrade of two of French banks by Moody's unsettled the markets overnight.
The European Commission will soon present options for the introduction of Eurobonds, Commission President Jose Manuel Barroso said Wednesday. However, he cautioned that this will not bring an immediate solution for all the problems faced by the region.
The dollar eased to $1.3741 versus the euro, moving further from a 7-month high of $1.3494 to start the week.
Industrial production in the Eurozone bounced back in July on the back of a marked pick up in German factory output, data released by Eurostat showed Wednesday. However, the increase was not as strong as expected.
Industrial output increased 1 percent on a monthly basis in July, reversing a 0.8 percent drop in June.
Moody's Investors Service Inc. Wednesday announced a one-notch downgrade of the long-term debt and deposit ratings of French banking giants Credit Agricole SA and Société Générale SA.
The dollar was stuck near $1.58 versus the sterling. U.K.'s jobless claims increased less than expected in August, while unemployment logged a marked rise, providing a mixed picture about the labor market.
The number of people claiming jobseekers' allowances rose 20,300 in August from July, smaller than the expected increase of 35,000, data from the Office for National Statistics showed Wednesday. The increase was also smaller than July's 33,700 monthly growth.
Overnight losses took the dollar to Y76.80 versus the yen, moving toward a record low of 75.93 from back in August.
The Commerce Department is set to release its retail sales report for August at 8:30 am ET. For August, economists estimate 0.2 percent increase in retail sales, and excluding autos, sales may have risen 0.3 percent. Around the same time, the Labor Department is scheduled to release its producer prices report for August. Economists expect the headline index for August to show a 0.1 percent drop, but the core producer price index is expected to have risen by 0.2 percent.
The Commerce Department is scheduled to release its business inventories report for July at 10 am ET. The report is expected to show a 0.5 percent increase in business inventories for the month.
