Forexpros – The U.S. dollar pushed higher against its major counterparts on Wednesday, as market sentiment was hit by remarks from Fitch ratings agency on the euro zone’s debt crisis and worse-than-expected euro zone economic data.
During European afternoon trade, the dollar was up against the euro, with EUR/USD shedding 0.50% to hit 1.2713.
The euro extended losses after Fitch Ratings said the European Central Bank needs to do more to prevent the collapse of the euro, saying the bank should step up its bond purchasing program to support troubled euro zone states.
Elsewhere, revised data showing that the euro zone’s economy grew less than initially expected in third quarter of 2011 underscored fears over impact of the region’s financial crisis on the outlook for growth.
Markets were also jittery ahead of Thursday’s ECB policy meeting and government bond auctions by Spain and Italy later in the week.
The greenback was higher against the pound, with GBP/USD falling 0.58% to hit 1.5392.
In the U.K., official data showed that the goods trade deficit expanded more-than-expected in November, increasing to GBP8.6 billion in November, compared with the deficit of GBP7.9 billion the previous month.
Analysts had expected the goods trade deficit to expand to GBP8.3 billion in November.
In addition, the greenback was stronger against the yen and the Swiss franc, with USD/JPY adding 0.15% to hit 76.95 and USD/CHF rising 0.44% to hit 0.9533.
Earlier Wednesday, Bank of Japan Governor Masaaki Shirakawa said governments must implement “necessary” reforms to aid the global economy, adding that the yen’s strength will “hurt the Japanese economy in the short term,” after the central bank lowered its economic assessment for a second straight month in December.
The greenback ticked higher against its counterparts in Canada, Australia and New Zealand, with USD/CAD gaining 0.12% to hit 1.0165, AUD/USD slipping 0.23% to hit 1.0290 and NZD/USD dipping 0.05% to hit 0.7939.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, advanced 0.55% to hit 81.52.
Later in the day, German Chancellor Angela Merkel was to meet with Italian Prime Minister Mario Monti, to discuss plans to shore up Italy’s finances ahead of a European Union summit on January 30.
Also Wednesday, the U.S. was to produce official data on crude oil stockpiles, while the Federal Reserve was to release its Beige Book.
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