Investing.com - The U.S. dollar extended gains against its major counterparts on Wednesday, as uncertainty over Greek debt restructuring talks supported safe haven demand, while investors began to focus on the Federal Reserve’s policy meeting later in the day.
During European afternoon trade, the dollar was sharply higher against the euro, with EUR/USD falling 0.70% to hit 1.2943.
Concerns over a potential Greek default persisted as talks on a deal to help restructure the country’s sovereign debt remained stalled.
The euro touched a session high against the greenback earlier, after data showed that German business confidence improved more-than-expected in January, moving higher for the third consecutive month.
The German research institute Ifo said its Business Climate Index rose to 108.3 in January from a reading of 107.3 the previous month. Analysts had expected the index to ease up to 107.5 in January.
The greenback was higher against the pound, with GBP/USD declining 0.47% to hit 1.5551.
In the U.K., preliminary data showed earlier that gross domestic product contracted more-than-expected in the fourth quarter, ticking down 0.2% after a 0.6% rise the previous quarter. Analysts had expected GDP to decline 0.1% in the fourth quarter.
Separately, the minutes of the Bank of England’s latest policy meeting revealed that policymakers believe that the U.K. is still facing considerable risks from the global economy.
The greenback was higher against the yen and the Swiss franc, with USD/JPY adding 0.49% to hit 78.04 and USD/CHF advancing 0.57% to hit 0.9330.
The yen weakened broadly after official data showed that Japan recorded its first annual trade deficit for 31 years in 2011, sparking concerns over the impact of the stronger yen and slowing global growth on the country’s largely export-driven economy.
However, the Bank of Japan said in its monthly report that the country's exports are likely to increase moderately going forward, as recovery in overseas economies gathers pace.
The greenback was also stronger against its Canadian Australian and New Zealand counterparts, with USD/CAD gaining 0.47% to hit 1.0136, AUD/USD shedding 0.32% to hit 1.0459 and NZD/USD tumbling 0.78% to hit 0.8053.
In Australia, official data showed that consumer price inflation was unexpectedly flat in the fourth quarter, confounding expectations for a 0.2% rise, after a 0.6% rise the previous quarter.
The data dampened expectations for a rate cut by Australia’s central bank next month.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.52%, to hit 80.42.
The Fed was to announce the federal funds rate and publish its official rate statement later Wednesday. In addition, the U.S. was to release industry data on pending home sales.
Meanwhile, the World Economic Forum was beginning its five-day annual meeting in Davos in Switzerland.
During European afternoon trade, the dollar was sharply higher against the euro, with EUR/USD falling 0.70% to hit 1.2943.
Concerns over a potential Greek default persisted as talks on a deal to help restructure the country’s sovereign debt remained stalled.
The euro touched a session high against the greenback earlier, after data showed that German business confidence improved more-than-expected in January, moving higher for the third consecutive month.
The German research institute Ifo said its Business Climate Index rose to 108.3 in January from a reading of 107.3 the previous month. Analysts had expected the index to ease up to 107.5 in January.
The greenback was higher against the pound, with GBP/USD declining 0.47% to hit 1.5551.
In the U.K., preliminary data showed earlier that gross domestic product contracted more-than-expected in the fourth quarter, ticking down 0.2% after a 0.6% rise the previous quarter. Analysts had expected GDP to decline 0.1% in the fourth quarter.
Separately, the minutes of the Bank of England’s latest policy meeting revealed that policymakers believe that the U.K. is still facing considerable risks from the global economy.
The greenback was higher against the yen and the Swiss franc, with USD/JPY adding 0.49% to hit 78.04 and USD/CHF advancing 0.57% to hit 0.9330.
The yen weakened broadly after official data showed that Japan recorded its first annual trade deficit for 31 years in 2011, sparking concerns over the impact of the stronger yen and slowing global growth on the country’s largely export-driven economy.
However, the Bank of Japan said in its monthly report that the country's exports are likely to increase moderately going forward, as recovery in overseas economies gathers pace.
The greenback was also stronger against its Canadian Australian and New Zealand counterparts, with USD/CAD gaining 0.47% to hit 1.0136, AUD/USD shedding 0.32% to hit 1.0459 and NZD/USD tumbling 0.78% to hit 0.8053.
In Australia, official data showed that consumer price inflation was unexpectedly flat in the fourth quarter, confounding expectations for a 0.2% rise, after a 0.6% rise the previous quarter.
The data dampened expectations for a rate cut by Australia’s central bank next month.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.52%, to hit 80.42.
The Fed was to announce the federal funds rate and publish its official rate statement later Wednesday. In addition, the U.S. was to release industry data on pending home sales.
Meanwhile, the World Economic Forum was beginning its five-day annual meeting in Davos in Switzerland.