Investing.com - The dollar backed off five-week highs against the euro on Wednesday, but the prospect of monetary easing still weighed on the single currency, while the pound was higher ahead of the Bank of England’s quarterly inflation report later in the session.
EUR/USD was trading at 1.3715, up 0.11% for the day after falling to lows of 1.3688 late Tuesday, the weakest since April 4.
The latest drop in the euro came after reports on Tuesday that Germany’s central bank is open to more stimulus measures from the European Central Bank.
The Wall Street Journal reported the Germany’s Bundesbank would back monetary easing measures if they were needed to keep low levels of inflation from becoming entrenched in the euro zone.
The euro came under heavy selling pressure after the ECB indicated late last week that it is “comfortable” with acting at its next meeting in June after it has a chance to review the latest economic projections.
GBP/USD was up 0.22% to 1.6862, as investors looked ahead to the latest U.K. jobs data and the Bank of England’s quarterly inflation report later in the session, for indications on the possible timing of a rate hike.
Elsewhere, the dollar slipped lower against the yen, with USD/JPY easing 0.18% to 102.08, while USD/CHF edged down to 0.8893.
The Australian dollar advanced to one-month highs, with AUD/USD rising 0.42% to 0.9397, and NZD/USD was up 0.23% to 0.8647.
The New Zealand dollar shrugged off data on Wednesday showing that domestic retail sales rose 0.7% in the first three months of the year, falling short of expectations of 0.9%.
USD/CAD was almost unchanged at 1.0909.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, eased 0.11% to 80.09.