U.S. dollar remains steady to lower on euro zone anticipation

Investing.com - The U.S. dollar was steady against its rivals Wednesday, as investors remained on the sidelines while they awaited fresh developments in the euro zone.

During European afternoon trade, the dollar was slightly lower against the euro, with EUR/USD gaining 0.05% to 1.2892.

Market participants remained cautious amid ongoing uncertainty over Spain’s position on requesting external financial aid and what form a bailout would take.

Earlier in the day, the International Monetary Fund said the crisis in the euro zone remains the greatest threat to the global economy and warned that policymakers need to urgently strengthen fiscal and financial ties within the euro area.

Meanwhile, concerns over whether international creditors will extend loans to Greece continued, as the country struggles to meet deficit reduction targets.

The greenback was steady close to a one-month high against the pound, with GBP/USD inching up 0.03% to 1.6008.

Sentiment on sterling remained fragile after a recent string of soft U.K. economic data undermined hopes for a sustained economic recovery and kept alive speculation over the possibility of another round of easing by the Bank of England.

Elsewhere, the greenback was fractionally higher against the yen, withUSD/JPY edging up 0.10% to 78.33, but edged lower against the Swiss franc, with USD/CHF easing down 0.06% to 0.9396.

The greenback was mixed against its Canadian, Australian and New Zealand counterparts, with USD/CAD inching down 0.01% to 0.9781, AUD/USDclimbing 0.41% to 1.0247 and NZD/USD edging up 0.04% to 0.8182.

The Australian dollar found support after the country’s treasury auctioned AUD4 billion in government debt earlier in the day.

Separately, a report by Westpac and the Melbourne Institute showed that Australian consumer sentiment improved only modestly in October, despite three interest rate cuts in the past six months by the country’s central bank.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, gave back 0.06% to 80.05.

Trade was expected to remain subdued on Wednesday, with no major economic data releases on the calendar.