Forexpros – The U.S. dollar was trading in a narrow range against its major counterparts on Wednesday, as fresh hopes for more easing from the Federal Reserve dented sentiment on the greenback, but unease over the crisis in the euro zone capped market gains.
During European morning trade, the dollar was slightly lower against the euro, with EUR/USD adding 0.15% to hit 1.2522.
The dollar weakened after Chicago Federal Reserve Bank President Charles Evans reiterated his support for additional monetary stimulus on Tuesday.
But concerns that a bailout of as much as EUR100 billion for Spain’s banks will add to the country’s debt burden and make it more difficult for Madrid to access credit markets continued to weigh on investor sentiment.
The yield on Spanish 10-year bonds eased back to 6.66% earlier, after surging to a euro-era high of 6.82% on Tuesday, coming close to the 7% level which is viewed as unsustainable in the long run after it prompted bailouts in Greece, Ireland and Portugal.
Investors were also jittery ahead of Sunday’s general election in Greece, which could determine the country’s future in the euro zone.
The greenback was fractionally lower against the pound, with GBP/USD inching up 0.02% to hit 1.5572.
Elsewhere, the greenback edged higher against the yen but slipped against the Swiss franc, with USD/JPY up 0.07% to hit 79.56 and USD/CHF losing 0.15% to hit 0.9591.
In Switzerland, official data showed that producer price index ticked down 0.2% in May, in line with expectations after a 0.1% decline the previous month.
The greenback was marginally weaker against its Canadian, Australian and New Zealand counterparts, with USD/CAD dipping 0.03% to hit 1.0259, AUD/USD easing up 0.11% to hit 0.9968 and NZD/USD gaining 0.29% to hit 0.7793.
Earlier Wednesday, Reserve Bank of Australian Governor Glen Stevens indicated that the outlook for the domestic economy was upbeat and said consumers should take advantage of the Australian dollar’s strength, which he said was bringing down the price of petrol and other imported goods.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, eased down 0.06%, to trade at 82.82.
Later Wednesday, the U.S. was to release official data on retail sales and producer price inflation, as well as a report on crude oil stockpiles.
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