Dollar mixed in volatile trade as ECB meeting awaited

Published 09/05/2012, 08:14 AM
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Investing.com - The U.S. dollar was mixed against the other major currencies in choppy trade on Wednesday, as investors remained on edge ahead of the keenly awaited European Central Bank meeting on Thursday.

During European afternoon trade, the dollar was slightly lower against the euro, with EUR/USD up 0.16% to 1.2586.

Investors remained cautious amid expectations that the ECB will announce more details of measures to help stabilize the region’s sovereign debt markets after its policy meeting on Thursday.

The euro weakened broadly earlier after a report showing that service sector activity in the euro zone contracted at a slightly faster rate than initially estimated in August added to fears that the bloc is set to enter a technical recession in the third quarter.

A separate report showed that retail sales in the bloc fell 0.2% in July, in line with expectations, bringing the annualized rate of decline to 1.7%.

The greenback was also down against the pound, with GBP/USD rising 0.29% to 1.5916.

The pound remained supported after stronger-than-forecast service sector data for August fuelled hopes that the Bank of England would refrain from implementing further stimulus measures at its policy meeting on Thursday.

Elsewhere, the greenback was little changed against the yen, with USD/JPY dipping 0.01% to 78.42, and edged lower against the Swiss franc, with USD/CHF dipping 0.08% to 0.9550.

The Swiss franc was little changed after official data showed that consumer price inflation in Switzerland was flat in August, compared to expectations for a 0.1% increase.

The greenback was higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD up 0.15% to 0.9873, AUD/USD losing 0.29% to trade at 1.0194 and NZD/USD dipping 0.06% to 0.7938.

The Australian dollar weakened after official data showed that the country’s gross domestic product expanded by 0.6% in the second quarter, disappointing expectations for growth of 0.7%, following a 1.4% expansion in the three months to March.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, slid 0.10% to 81.28.

Later Wednesday, the U.S. was to release revised data on nonfarm productivity.



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