Investing.com - The dollar gained against most major global currencies on Wednesday after investors flocked to the greenback despite rekindling hopes the European Central Bank is planning to buy troubled sovereign debt to ease the debt crisis.
Investors spent the morning snapping up nicely priced greenbacks to await the release of the minutes from the Federal Reserve's latest monetary policy meeting.
In Asian trading on Wednesday, EUR/USD was down 0.05% at 1.2466.
A string of solid economic indicators in the U.S. has lowered expectations for the U.S. central bank to roll out a new round of stimulus measures that weaken the dollar to spur recovery.
Consumer sentiment figures have surprised on the upside as have retail sales numbers, industrial production figures and other indicators.
The dollar will dip should the minutes reveal more calls for monetary stimulus among voting members than expected, but markets remained on standby mode.
The dollar tanked earlier in European and U.S. sessions on rekindling hopes the European Central Bank will buy debt from financially distressed countries to lower borrowing costs there and ease the crisis.
Der Spiegel reported over the weekend that the European Central Bank may decide to cap yields in eurozone sovereign debt markets at its September policy meeting.
The ECB would achieve such a policy via purchasing sovereign bonds in the open market, though bank officials branded the news report as misleading, which sent the euro falling and the dollar gaining earlier this week.
However, The Daily Telegraph later said it found that Der Spiegel's reporting was accurate, which sent the dollar falling and the euro and other higher-yielding currencies shooting up.
Trade data out of Japan fueled some dollar buying.
Japan reported that exports dropped 8.1% in July, though imports rose 2.1%, fueling fears that overseas demand for Japanese products and services could be waning.
Meanwhile, investors put talk of ECB intervention aside and focused on Greece to see if a string of high-level meetings will give the country more time to push through reforms.
Luxemburg’s Prime Minister Jean-Claude Juncker, also head of a group of eurozone finance ministers, was set to meet with Greek Prime Minister Antonis Samaras later Wednesday to discuss a two-year extension for Greece to push through reform programs.
German Chancellor Angela Merkel is scheduled to meet with French President Francois Hollande on Thursday to discuss ways to firewall and extinguish the crisis, while Samaras will meet both French and German leaders later in the week to discuss ways to rescue Greece.
The greenback, meanwhile, was up against the pound, with GBP/USD trading down 0.10% at 1.5771.
The dollar was down against the yen, with USD/JPY trading down 0.04% at 79.25, and up against the Swiss franc, with USD/CHF trading up 0.05% at 0.9635.
The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.18% at 0.9910, AUD/USD down 0.41% at 1.0446 and NZD/USD down 0.34% at 0.8082.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.02% at 81.95.
Investors will remain focused on Wednesday, when the Federal Reserve releases the minutes of its most recent monetary policy meeting.
Investors spent the morning snapping up nicely priced greenbacks to await the release of the minutes from the Federal Reserve's latest monetary policy meeting.
In Asian trading on Wednesday, EUR/USD was down 0.05% at 1.2466.
A string of solid economic indicators in the U.S. has lowered expectations for the U.S. central bank to roll out a new round of stimulus measures that weaken the dollar to spur recovery.
Consumer sentiment figures have surprised on the upside as have retail sales numbers, industrial production figures and other indicators.
The dollar will dip should the minutes reveal more calls for monetary stimulus among voting members than expected, but markets remained on standby mode.
The dollar tanked earlier in European and U.S. sessions on rekindling hopes the European Central Bank will buy debt from financially distressed countries to lower borrowing costs there and ease the crisis.
Der Spiegel reported over the weekend that the European Central Bank may decide to cap yields in eurozone sovereign debt markets at its September policy meeting.
The ECB would achieve such a policy via purchasing sovereign bonds in the open market, though bank officials branded the news report as misleading, which sent the euro falling and the dollar gaining earlier this week.
However, The Daily Telegraph later said it found that Der Spiegel's reporting was accurate, which sent the dollar falling and the euro and other higher-yielding currencies shooting up.
Trade data out of Japan fueled some dollar buying.
Japan reported that exports dropped 8.1% in July, though imports rose 2.1%, fueling fears that overseas demand for Japanese products and services could be waning.
Meanwhile, investors put talk of ECB intervention aside and focused on Greece to see if a string of high-level meetings will give the country more time to push through reforms.
Luxemburg’s Prime Minister Jean-Claude Juncker, also head of a group of eurozone finance ministers, was set to meet with Greek Prime Minister Antonis Samaras later Wednesday to discuss a two-year extension for Greece to push through reform programs.
German Chancellor Angela Merkel is scheduled to meet with French President Francois Hollande on Thursday to discuss ways to firewall and extinguish the crisis, while Samaras will meet both French and German leaders later in the week to discuss ways to rescue Greece.
The greenback, meanwhile, was up against the pound, with GBP/USD trading down 0.10% at 1.5771.
The dollar was down against the yen, with USD/JPY trading down 0.04% at 79.25, and up against the Swiss franc, with USD/CHF trading up 0.05% at 0.9635.
The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.18% at 0.9910, AUD/USD down 0.41% at 1.0446 and NZD/USD down 0.34% at 0.8082.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.02% at 81.95.
Investors will remain focused on Wednesday, when the Federal Reserve releases the minutes of its most recent monetary policy meeting.