Investing.com - The U.S. dollar extended gains against its global counterparts on Wednesday, as demand for the currency was supported by expectations that the Federal Reserve is moving away from a policy of easing as the outlook for the U.S. economy improves.
During U.S. morning trade, the dollar was trading close to a one-month high against the euro, with EUR/USD shedding 0.44% to hit 1.3022.
Demand for the greenback remained robust as investors trimmed back expectations for a fresh round of monetary easing after the Fed upgraded its outlook for the economy on Tuesday.
In its rate statement, the Fed said it now expects to see “moderate economic growth” after its January statement said growth would be “modest” and added that higher oil prices could place upward pressure on inflation.
However, policymakers reiterated their intention to keep the benchmark interest rate unchanged at a record low through late 2014 and warned that risks to the economic recovery still remained.
In the euro zone, official data showed that industrial production across the region rose in January for the first time in three months, while the annualized rate of consumer price inflation was unchanged in February and remained above the European Central Bank’s target.
The greenback was also higher against the pound, with GBP/USD slipping 0.16% to hit 1.5679.
Earlier in the day, official data showed that the number of people claiming unemployment benefits in the U.K. rose more-than-expected in February, while the unemployment rate held steady at 8.4%, the highest level since 1995.
The greenback was sharply higher against the yen and the Swiss franc, with USD/JPY jumping 1% to hit 83.76 and USD/CHF rallying 0.93% to hit 0.9317.
The Swiss franc was under broad selling pressure ahead of the Swiss National Bank’s policy meeting on Tuesday, amid speculation over how long the bank’s 1.20 exchange rate cap against the euro will remain in place.
Earlier Wednesday, a report showed that Swiss economic sentiment improved this month, rising significantly for the third consecutive month.
The Centre for European Economic Research (ZEW) said its indicator of economic sentiment improved by 21.2 points to a flat reading of 0.0 from a reading of minus 21.2 in February.
Elsewhere, the greenback was stronger against its Canadian, Australian and New Zealand cousins, with USD/CAD adding 0.30% to hit 0.9914, AUD/USD tumbling 1.03% to hit 1.0442 and NZD/USD plunging 1.79% to hit 0.8083.
In Australia earlier, a report showed that consumer confidence slumped in March, as uncertainty over the global economic outlook weighed and as major banks raised mortgage rates, despite two successive rate cuts by the Reserve Bank of Australia late last year.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.45% to hit 80.99.
Also Wednesday, official data showed that the U.S. current account deficit widened more-than-expected in the final three months of 2011.
The U.S. Bureau of Economic Analysis said the country’s current account deficit widened to a seasonally adjusted USD124.1 billion, against expectations for a deficit of USD114.0 billion in the fourth quarter.
During U.S. morning trade, the dollar was trading close to a one-month high against the euro, with EUR/USD shedding 0.44% to hit 1.3022.
Demand for the greenback remained robust as investors trimmed back expectations for a fresh round of monetary easing after the Fed upgraded its outlook for the economy on Tuesday.
In its rate statement, the Fed said it now expects to see “moderate economic growth” after its January statement said growth would be “modest” and added that higher oil prices could place upward pressure on inflation.
However, policymakers reiterated their intention to keep the benchmark interest rate unchanged at a record low through late 2014 and warned that risks to the economic recovery still remained.
In the euro zone, official data showed that industrial production across the region rose in January for the first time in three months, while the annualized rate of consumer price inflation was unchanged in February and remained above the European Central Bank’s target.
The greenback was also higher against the pound, with GBP/USD slipping 0.16% to hit 1.5679.
Earlier in the day, official data showed that the number of people claiming unemployment benefits in the U.K. rose more-than-expected in February, while the unemployment rate held steady at 8.4%, the highest level since 1995.
The greenback was sharply higher against the yen and the Swiss franc, with USD/JPY jumping 1% to hit 83.76 and USD/CHF rallying 0.93% to hit 0.9317.
The Swiss franc was under broad selling pressure ahead of the Swiss National Bank’s policy meeting on Tuesday, amid speculation over how long the bank’s 1.20 exchange rate cap against the euro will remain in place.
Earlier Wednesday, a report showed that Swiss economic sentiment improved this month, rising significantly for the third consecutive month.
The Centre for European Economic Research (ZEW) said its indicator of economic sentiment improved by 21.2 points to a flat reading of 0.0 from a reading of minus 21.2 in February.
Elsewhere, the greenback was stronger against its Canadian, Australian and New Zealand cousins, with USD/CAD adding 0.30% to hit 0.9914, AUD/USD tumbling 1.03% to hit 1.0442 and NZD/USD plunging 1.79% to hit 0.8083.
In Australia earlier, a report showed that consumer confidence slumped in March, as uncertainty over the global economic outlook weighed and as major banks raised mortgage rates, despite two successive rate cuts by the Reserve Bank of Australia late last year.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.45% to hit 80.99.
Also Wednesday, official data showed that the U.S. current account deficit widened more-than-expected in the final three months of 2011.
The U.S. Bureau of Economic Analysis said the country’s current account deficit widened to a seasonally adjusted USD124.1 billion, against expectations for a deficit of USD114.0 billion in the fourth quarter.