Investing.com - The dollar was lower against the yen and the Swiss franc on Wednesday as concerns over slowing growth in China and the crisis in Ukraine spurred risk aversion, while the euro rose back towards last week’s two-and-a-half year highs against the dollar.
USD/JPY hit 102.55, the lowest since March 6 and was last down 0.22% to 102.77.
Safe haven demand continued to be underpinned after unexpectedly weak Chinese data on trade and Inflation over the weekend raised fresh concerns over the strength of the world’s second-largest economy.
Investors were also on edge after China’s first domestic bond default last Friday fuelled fears over problems in the country’s financial sector.
Investors also remained wary as the standoff between Russia and the West over Ukraine intensified after the leaders of the G7 group of nations called on Russia to cease efforts to annex the Crimea region.
USD/CHF hit 0.8744, the lowest level since October 2011, and was last down 0.35% to 0.8750.
Elsewhere, EUR/USD rose 0.27% to 1.3897, not far from Friday’s high of 1.3915, the strongest level since October 31, 2011.
The euro was boosted after European Central Bank executive board member Benoit Coeure said Wednesday the bank did not see any indications of deflation in the euro area, but it remained a possible risk.
He added that the central bank has a number of policy measures at its disposal to address the problem.
The euro strengthened broadly after the ECB left interest rates at a record low 0.25% at its policy meeting last week and implemented no new policy measures to shore up growth, despite forecasting low inflation for years to come.
Earlier Wednesday, data showed that euro zone industrial production was down 0.2% in January from a month earlier, dragged down by a 2.5% drop in energy output.
However, the underlying trend remained strong, with industrial output rising 2.1% on a year-over-year basis, after rising at an annual rate of 1.2% in December.
The dollar was fractionally higher against the pound, with GBP/USD dipping 0.06% to 1.6607.
The Australian dollar was little changed, with AUD/USD trading at 0.8973, moving off lows of 0.8924 struck earlier in the session. China is Australia’s largest export market, which makes the Australian dollar sensitive to worries over slackening demand from China.
Meanwhile, NZD/USD edged up 0.14% to 0.8480, supported by expectations for a rate hike by the Reserve Bank at its upcoming policy meeting on Thursday.
The U.S. dollar pushed higher against the Canadian dollar, with USD/CAD rising 0.26% to 1.1135.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.16% to 79.76.