Investing.com - The dollar edged lower against most major currencies on Wednesday after investors flocked to the yen on concerns China's economy may grow less than expected going forward, though losses were seen as short-lived on concerns the European crisis may return.
In U.S. trading on Wednesday, EUR/USD was up 0.55% at 1.2441.
The yen rose on jitters over the outlook for China’s economy after Beijing set new restrictions on collateral for short-term loans.
The move fueled fears that the China may grow less than anticipated, which fueled safe-haven yen positions that came at the greenback's expense.
The yen often rises when Japanese stocks fall and growth-sensitive Australian and New Zealand dollars slide, and the yen's advance brought the euro and others up with it on Wednesday.
Still, the dollar's losses were seen as limited due to a surprise decision by the Greek government to bring forward a parliamentary vote for president to next week from February.
Markets were spooked by the risk of snap elections, which could take place if Prime Minister Antonis Samaras’s candidate is not approved by parliament, which could see the anti-bailout Syriza party take power.
Still, the euro held onto its gains as investors continued to sell the greenback for profits and await fresh U.S. data.
Last week’s strong U.S. jobs report for November prompted investors to bring forward expectations for the first hike in interest rates to mid-2015 from September 2015 ahead of the data.
The Labor Department reported Friday that the U.S. economy added 321,000 jobs in November, well past expectations for a 225,000 reading.
Investors were looking ahead to next week’s policy statement from the Fed amid speculation that policymakers could drop an assurance that interest rates will stay low for a "considerable time."
The dollar was down against the yen, with USD/JPY down 1.38% at 118.02, and down against the Swiss franc, with USD/CHF down 0.45% at 0.9670.
The greenback was down against the pound, with GBP/USD up 0.27% at 1.5711.
The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.30% at 1.1479, AUD/USD up 0.25% at 0.8315 and NZD/USD up 1.78% at 0.7815.
The US dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.54% at 88.26.
On Thursday, the U.S. is to release data on retail sales, the government measure of consumer spending, as well as the weekly report on jobless claims.