The U.S. dollar extended its early decline against its major rivals in European deals on Wednesday, as lingering concerns about global economic growth arose speculation that the Fed would prefer slower pace of rate rises, after its expected rate lift-off next week.
Although the investors are predicting the Fed to hike rate by 0.25 basis points to 0.50 percent at its meeting on December 15-16, ongoing global worries appear to have led to assumption that it may adopt a very slow path of rate increases subsequently.
Investors await the release of the wholesale inventory report today, while weekly jobless claims and import/export prices are scheduled for Thursday. The producer price index, retail sales and consumer sentiment are all slated for Friday.
The currency has been lower in the Asian session, as the weak cues from overseas markets kept investors cautious.
The greenback depreciated to a 5-day low of 1.0947 against the euro, off its early high of 1.0879. On the upside, 1.105 is possibly seen as the next support level for the greenback. At Tuesday’s close, the pair was worth 1.0891.
Germany’s exports and imports declined more than expected in October, according to figures from Destatis.
Exports fell 1.2 percent in October from September, when it advanced 2.6 percent.
The greenback fell to 0.9895 against the franc, its weakest since December 3, and was down by 0.28 percent from yesterday’s closing value of 0.9923. The next possible support for the greenback-franc pair lies around the 0.975 zone.
Data from the State Secretariat for Economic Affairs showed that Switzerland’s unemployment rate held steady for yet another month in November.
The seasonally adjusted jobless rate was 3.4 percent, unchanged from October. The figure was in line with economists’ expectations.
Reversing from an early high of 1.5004 against the pound, the greenback slipped to a 2-day low of 1.5094. The next possible support for the greenback may be found around the 1.52 level.
Data from the National Institute of Economic and Social Research showed that Britain’s economic growth improved slightly in three months to November.
The think tank said monthly estimates of gross domestic product suggested a 0.6 percent rise in output during three months ending November, which was slightly faster than a 0.5 percent increase seen in three months to October.
The greenback slid to a 6-day low of 122.45 against the Japanese yen, after having advanced to 123.05 at 8:15 pm ET. On the downside, the greenback may locate support around the 121.00 region.
Looking ahead, the Energy Information Administration’s U.S. weekly crude oil inventories data for the week ended December 4 is set to be announced shortly.
Later, European Central Bank Executive Board member Sabine Lautenschlaeger is expected to speak at the 11th High-Level Meeting for Middle East and North Africa Region, in Abudhabi, United Arab Emirates.
The material has been provided by InstaForex Company – www.instaforex.com