Forexpros – The U.S. dollar was steady against its major counterparts on Wednesday, as investors turned their attention to Thursday’s European Central Bank policy meeting and the start of a critical two-day summit of European Union leaders.
During U.S. morning trade, the dollar was slightly higher against the euro, with EUR/USD dipping 0.06% to hit 1.3392.
Sentiment on the euro was dented earlier after the Wall Street Journal reported that an unnamed senior German official expressed pessimism on the prospect of success at the summit, scheduled to begin Thursday.
European leaders are to discuss proposed changes to EU treaties which would allow for greater fiscal integration in the single currency bloc, as well as an enlargement of the bloc’s bailout fund, the European Financial Stability Facility and the permanent structure that will replace it, the European Stability Mechanism.
But the single currency found some support from speculation that the ECB may cut interest rates by 0.25% to 1% at its policy-setting meeting on Thursday.
The greenback was down against the pound, with GBP/USD adding 0.51% to hit 1.5678.
Earlier in the day, U.K. Chancellor George Osborne said the debt crisis in the euro zone poses the biggest downside risk to the outlook for economic growth.
The remarks came after official data showing that U.K. manufacturing output posted the largest decline in six months in October, while industrial production also posted the biggest drop since April.
Elsewhere, the greenback was slightly lower against the yen and the Swiss franc, with USD/JPY dipping 0.02% to hit 77.71, and USD/CHF easing down 0.07% to hit 0.9252.
The greenback was fractionally higher against its Canadian and New Zealand counterparts but slid against its Australian cousin, with USD/CAD edging up 0.12% to hit 1.0112, NZD/USD shedding 0.33% to hit 0.7771 and AUD/USD rising 0.12% to hit 1.0257.
Earlier Wednesday, government data showed that Australian gross domestic product grew by 1% from the second quarter, slightly below expectations for a 1.2% expansion, but up 2.5% from a year earlier.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, dipped 0.03% to hit 78.62.
Also Wednesday, U.S. Treasury Secretary Timothy Geithner said the International Monetary Fund has a key role to play in resolving the euro zone’s debt crisis, but dismissed speculation that the Federal Reserve would lend money to the institution.
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