Forexpros – The U.S. dollar was broadly higher against the other major currencies on Wednesday, supported by diminished expectations for another round of easing by the Federal Reserve, as investors looked ahead to U.S. data on inflation later in the day.
During European afternoon trade, the dollar was higher against the euro, with EUR/USD shedding 0.38% to 1.2274.
Data on Tuesday showed that U.S. retail sales snapped four successive months of declines in July, jumping 0.8%, surpassing expectations for a 0.3% increase.
The euro remained under pressure amid concerns over the economic outlook after data on Tuesday showed that the euro zone economy contracted 0.2% in the second quarter and German economic sentiment deteriorated this month.
Meanwhile, hopes that the European Central Bank will soon move to stem the debt crisis in the euro zone faded, as investors waited for more details of the bank’s proposed bond buying program to emerge.
Trade was subdued and volumes remained light, with many market participants away for summer holidays.
The greenback was little changed against the pound, with GBP/USD inching up 0.01% to 1.5678.
The pound found support after the minutes of the Bank of England’s August meeting showed that policymakers voted unanimously to keep U.K. interest rates unchanged at 0.5% at its meeting this month and to leave the quantitative easing program unchanged at GBP375 billion.
A separate report showed that the number of people claiming unemployment benefits in the U.K. fell unexpectedly in July and the nation’s unemployment rate ticked down to 8% from 8.1% in June.
Elsewhere, the greenback was higher against the softer yen and the Swiss franc, with USD/JPY rising 0.29% to 78.96 and USD/CHF adding 0.37% to trade at 0.9782.
The greenback was mostly higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD dipping 0.03% to 0.9919, AUD/USD falling 0.19% to 1.0470 and NZD/USD inching down 0.07% to trade at 0.8048.
In Australia, data showed that the Westpac index of consumer sentiment fell 2.5% in August from July, despite recent interest rate cuts by the Reserve Bank of Australia.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.30% to 82.81.
Later in the day, the U.S. was to release official data on consumer price inflation and industrial production, as well as a report on manufacturing activity in the New York area.