Investing.com - The U.S. dollar gave up ground against the euro and its other major counterparts on Wednesday, as market sentiment firmed up, but safe haven demand remained supported amid concerns over political turmoil in Greece.
During European afternoon trade, the dollar was slightly lower against the euro, with EUR/USD edging up 0.06% to hit 1.2739.
The euro firmed up after falling sharply earlier in the session, but concerns over the threat of a Greek exit from the euro zone remained, as the country prepared to face fresh elections next month.
Peripheral bond yields eased as market sentiment improved, with the yield on Spanish 10-year bonds easing back to 6.3% from 6.41%, while the yield on Italian 10-year bonds pulled back to 5.98% after rising above 6% earlier.
Meanwhile, a report showed that consumer price inflation in the euro zone held steady at 2.6% in April, unchanged from a preliminary estimate. Month-on-month, CPI rose 0.5%, in line with expectations, after rising by 1.3% in March.
The greenback was higher against the pound, with GBP/USD shedding 0.31% to hit 1.5946.
The pound weakened broadly after the Bank of England’s quarterly inflation report said inflation will not fall back as quickly as hoped and was likely to remain above its 2% targeted rate for at least another year.
The BoE also revised down economic growth forecasts, with policymakers now expecting an annual rate of growth of approximately 2.6% in two years' time, compared with February's forecast of 3%.
BoE Governor Mervyn King said that sovereign debt crisis in the euro zone posed the single biggest threat to the U.K. economic recovery.
Earlier Wednesday, official data showed that the number of people claiming unemployment benefits in the U.K. posted the largest monthly drop since July 2010 last month, declining by 13,700, while the unemployment rate ticked down to 8.2%.
Elsewhere, the greenback was higher against the yen but slipped against the Swiss franc, with USD/JPY adding 0.36% to hit 80.47 and USD/CHF losing 0.13% to hit 0.9423.
The greenback was mixed against its Canadian, Australian and New Zealand counterparts, with USD/CAD inching up 0.02% to hit 1.0074, AUD/USD easing up 0.07% to hit 0.9943 and NZD/USD slipping 0.23% to hit 0.7674.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, dipped 0.02%, to trade at 81.42.
Later in the day, the U.S. was to produce official data on building permits and housing starts, followed by reports on the capacity utilization rate and industrial production. In addition, the Federal Reserve was to publish the minutes of its most recent policy meeting.
During European afternoon trade, the dollar was slightly lower against the euro, with EUR/USD edging up 0.06% to hit 1.2739.
The euro firmed up after falling sharply earlier in the session, but concerns over the threat of a Greek exit from the euro zone remained, as the country prepared to face fresh elections next month.
Peripheral bond yields eased as market sentiment improved, with the yield on Spanish 10-year bonds easing back to 6.3% from 6.41%, while the yield on Italian 10-year bonds pulled back to 5.98% after rising above 6% earlier.
Meanwhile, a report showed that consumer price inflation in the euro zone held steady at 2.6% in April, unchanged from a preliminary estimate. Month-on-month, CPI rose 0.5%, in line with expectations, after rising by 1.3% in March.
The greenback was higher against the pound, with GBP/USD shedding 0.31% to hit 1.5946.
The pound weakened broadly after the Bank of England’s quarterly inflation report said inflation will not fall back as quickly as hoped and was likely to remain above its 2% targeted rate for at least another year.
The BoE also revised down economic growth forecasts, with policymakers now expecting an annual rate of growth of approximately 2.6% in two years' time, compared with February's forecast of 3%.
BoE Governor Mervyn King said that sovereign debt crisis in the euro zone posed the single biggest threat to the U.K. economic recovery.
Earlier Wednesday, official data showed that the number of people claiming unemployment benefits in the U.K. posted the largest monthly drop since July 2010 last month, declining by 13,700, while the unemployment rate ticked down to 8.2%.
Elsewhere, the greenback was higher against the yen but slipped against the Swiss franc, with USD/JPY adding 0.36% to hit 80.47 and USD/CHF losing 0.13% to hit 0.9423.
The greenback was mixed against its Canadian, Australian and New Zealand counterparts, with USD/CAD inching up 0.02% to hit 1.0074, AUD/USD easing up 0.07% to hit 0.9943 and NZD/USD slipping 0.23% to hit 0.7674.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, dipped 0.02%, to trade at 81.42.
Later in the day, the U.S. was to produce official data on building permits and housing starts, followed by reports on the capacity utilization rate and industrial production. In addition, the Federal Reserve was to publish the minutes of its most recent policy meeting.