Dollar broadly lower as markets turn to ECB operation

Published 02/29/2012, 04:44 AM
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Investing.com - The U.S. dollar was broadly lower against its major counterparts on Wednesday, as investors were awaiting the outcome of a second liquidity operation by the European Central Bank later in the day.

During European morning trade, the dollar was steady against the euro, with EUR/USD inching down 0.02% to hit 1.3454.

The euro found support ahead of the launch of the ECB’s second three-year long-term refinancing operation, which market participants expected to total nearly EUR500 billion.

In December, the EBC issued EUR489 billion in three-year loans to more than 500 banks, averting a liquidity shortage in the euro zone’s banking system and easing pressure on the region’s bond markets.

Also Wednesday, official data showed that the number of unemployed people in Germany held steady in February, while the country’s jobless rate unexpectedly ticked up to 6.8% from a record low of 6.7%.

The greenback was lower against the pound, with GBP/USD adding 0.17% to hit 1.5929.

A report earlier showed that consumer confidence in the U.K. remained unchanged in February, after rising to seven-month high last month.

A separate report showed that U.K. net lending to individuals rose more-than-expected in January, climbing GBP1.8 billion after a GBP0.9 billion increase the previous month.

The greenback was higher against the yen and steady against the Swiss franc, with USD/JPY adding 0.11% to hit 80.55 and USD/CHF edging up 0.01% to hit 0.8957.

In Japan, preliminary data showed that industrial production rose more-than-expected in January, advancing 2% after a 3.8% rise the previous month.

Analysts had expected industrial production to rise 1.6% in January.

Meanwhile, a report by the KOF Economic Research Agency showed that its economic barometer for Switzerland improved less-than-expected to minus 0.12 in February from a reading of minus 0.15.

The greenback was lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD shedding 0.30% to hit 0.9923, AUD/USD rising 0.44% to hit 1.0814 and NZD/USD climbing 0.60% to hit 0.8427.

Official data showed earlier that retail sales in Australia rose 0.3% in January, in line with expectations, after a 0.1% decline the previous month.

Meanwhile, separate reports showed that construction work done in Australia fell more-than-expected in the fourth quarter, while private sector credit rose less-than-expected in January.

In New Zealand a report showed that business confidence significantly more-than-expected in February and another report showed that buildings consents jumped more-than-expected in January.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, edged up 0.04% to hit 78.26.

Later in the day, Federal Reserve Chairman Ben Bernanke was to testify on the semi-annual monetary policy report before the House Financial Services Committee in Washington.


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