Forexpros – The U.S. dollar was broadly lower against its major counterparts on Wednesday, as optimism over signs of progress in containing the debt crisis in the euro zone boosted demand for riskier assets.
During early European afternoon trade, the greenback was sharply lower against the euro, with EUR/USD climbing 0.97% to hit 1.3774.
The single currency was supported after European officials said Greece was likely to receive its next tranche of financial aid next month.
Risk sentiment was also boosted after German Chancellor Angela Merkel said she was certain the planned enhancement of the region’s bailout fund would be fully ratified by the end of the month, as pressure mounted after the Slovakian government failed to pass the measure on Tuesday.
Slovakia is the last euro zone state to vote on the European Financial Stability Facility reform.
Earlier in the day, official data showed that industrial production in the euro zone rose more-than-expected in August, climbing for the second straight month.
The greenback was also down against the pound, with GBP/USD rising 1.20% to hit 1.5764.
Earlier Wednesday, the Office for National Statistics said the number of people in the U.K. claiming unemployment benefit rose by 17,500 last month. Analysts had forecast a rise of 24,000.
But the ONS said the unemployment rate ticked up to 8.1% from August, the highest level since October 1996, confounding expectations for the rate to remain unchanged at 7.9%.
Meanwhile, the greenback was almost unchanged against the yen but lower against the Swiss franc with USD/JPY inching up 0.03% to hit 76.67 and USD/CHF sliding 1.25% to hit 0.8973.
Earlier in the day, official data showed that Japanese machinery orders rebounded in August, indicating that companies are willing to invest despite uncertainties over the global economic recovery.
The greenback was lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD tumbling 1.23% to hit 1.0172, AUD/USD surging 1.73% to hit 1.0126 and NZD/USD rising 1.75% to hit 0.7935.
Official data released earlier showed that the number of new home loans granted in Australia rose more-than-expected in August, up for a fifth successive month, while a separate report showed that consumer confidence extended its rebound from a two-year low.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.79% to hit 77.31.
Later in the day, European Commission President Jose Barroso was to present proposals on bank recapitalization to the European Parliament. The U.S. was to publish the minutes of the Federal Reserve’s most recent policy-setting meeting.
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