IV:Dollar lower vs. euro, higher vs. yen ahead of Fed
Investing.com - The dollar fell to 14-month lows against the euro on Wednesday and hit two-and-a-half-year highs against the yen as market sentiment strengthened ahead of the outcome of the Federal Reserve’s policy meeting and U.S. data on economic growth later in the trading day.
During European morning trade, the dollar rose to its highest levels since mid-June 2010 against the yen, with USD/JPY up 0.54% to 90.21.
Market participants were looking ahead to a series of significant U.S. economic events, including preliminary data on U.S. fourth quarter growth and the outcome of the Federal Reserve’s policy setting meeting later Wednesday.
The Federal Reserve was expected to reaffirm its commitment to its easing program until the U.S. unemployment rate falls below 6.5%.
The U.S. was also to release data on January’s ADP nonfarm payrolls, ahead of Friday’s government data on nonfarm payrolls.
In Japan, Prime Minister Shinzo Abe earlier rejected criticism that Japan’s fiscal and monetary stimulus program was aimed at weakening the yen, saying the measures were aimed at combating deflation.
The greenback hit 14-month lows against the euro, with EUR/USD climbing 0.23% to 1.3524 as sentiment on the single currency continued to be underpinned by indications that the worst of the crisis in the euro zone is over.
The euro shrugged off data showing that Spain’s economy contracted by 0.7% in the three months to December, bringing the annualized rate of contraction to 1.8%.
The greenback was trading close to five-month highs against the pound, with GBP/USD sliding 0.16% to 1.5736.
The pound remained broadly weaker after data last week showed that the U.K. economy contracted 0.3% in the fourth quarter, putting Britain on track for a triple-dip recession.
The greenback was almost unchanged against the Swiss franc, with USD/CHF dipping 0.04% to 0.9206.
The greenback was broadly higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD rising 0.15% to 1.0024, AUD/USD down 0.32% to 1.0440 and NZD/USD falling 0.63% to 0.8340.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, dipped 0.07% to 79.55.
