Investing.com - The dollar was trading near 11-month highs against a basket of other major currencies on Wednesday as renewed concerns over the crisis in Ukraine fuelled widespread risk aversion.
Markets were jittery as a buildup of Russian armed forces along its border with Ukraine fuelled fresh concerns over geopolitical tensions in the region, underpinning safe haven demand.
The dollar was lower against the yen, with USD/JPY shedding 0.27% to trade at 102.32.
The euro fell to nine month lows, with EUR/USD down 0.20% to 1.3349.
The euro came under renewed selling pressure after official data showed that Italy unexpectedly slid back into a recession in the second quarter, as gross domestic product contracted by 0.2%. Economists had forecast growth of 0.2%.
The data came after a report earlier in the day showed that German factory orders unexpectedly in June, fuelling concerns that the recovery in the euro zone is faltering.
Investors were looking ahead to the outcome of Thursday’s European Central Bank meeting as concerns over the divergence in monetary policy between it and other major central banks weighed.
The dollar was near eight month highs against the Swiss franc, with USD/CHF up 0.15% to 0.9104.
GBP/USD was down 0.28% to 1.6837 after a report earlier Wednesday showed that industrial and manufacturing output in the U.K. expanded at a slower than expected rate in June.
NZD/USD was down 0.14% to 0.8455, off the lows of 0.8424 hit earlier in the session following the release of a disappointing domestic jobs report, while AUD/USD eased up 0.19% to 0.9321,
The Canadian dollar was steady near three month lows, with USD/CAD dipping 0.05% to 1.0954, off session highs of 1.0986.
The Canadian dollar erased losses after official data showed that the country’s trade surplus unexpectedly widened to C$1.86 billion in June from C$580 million in May. Canadian exports grew 1.1% to a record high C$45.2 billion and imports decreased 1.8% to C$43.3 billion.
In the U.S., official data showed that the trade deficit narrowed unexpectedly to $41.54 billion in June from a deficit of $44.66 billion a month earlier. It was the smallest deficit in five months as exports inched up 0.1% and imports fell 1.2%.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.11% to 81.68 after touching highs of 81.77 earlier, the most since September.