Forexpros – The U.S. dollar remained broadly higher against its major counterparts on Wednesday, amid renewed concerns over the debt crisis in the euro zone despite a record refinancing operation by the European Central Bank earlier in the day.
During U.S. morning trade, the dollar was higher against the euro, with EUR/USD shedding 0.26% to hit 1.3047.
Risk appetite was hit as Italian and Spanish short-term borrowing costs crept higher, even after the ECB allotted EUR489.19 billion in three-year loans to 523 European banks in an attempt to avert a liquidity crunch in the euro zone.
It is hoped that the funds may also be used by lenders to purchase the sovereign debt of indebted euro zone states, easing pressure on borrowing costs.
The amount allotted was the largest ever for a longer-term refinancing operation by the ECB and underlined concerns over the scale of the financial crisis in the euro zone.
The greenback was almost unchanged against the pound, with GBP/USD inching up 0.01% to hit 1.5664.
In the U.K., the minutes of the Bank of England’s December meeting showed that policymakers believed the balance of risks for growth and the outlook for inflation had not significantly altered from the previous month, but indicated that the bank may increase its asset purchase program in the New Year.
Earlier Wednesday, a report by researchers GfK showed that consumer confidence in the U.K. weakened in December, hitting the lowest level since February 2009.
The greenback inched higher against the yen but posted stronger gains against the Swiss franc, with USD/JPY easing up 0.04% to hit 77.92 and USD/CHF rising 0.39% to hit 0.9350.
The greenback was mixed against its Canadian, Australian and New Zealand cousins, with USD/CAD down 0.18% to hit 1.0280, AUD/USD dipping 0.01% to hit 1.0078 and NZD/USD slipping 0.12% to hit 0.7669.
In Canada, official data showed that retail sales rose by a seasonally adjusted 1.0% in October, more than doubling expectations for a 0.4% gain.
Core retail sales, which exclude automobile sales, rose by a seasonally adjusted 0.7% in October, exceeding expectations for a 0.4% increase.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, edged up 0.12% to hit 80.33.
Also Wednesday, a report by the National Association of Realtors said that U.S. existing home sales rose by 4% to a seasonally adjusted 4.42 million units in November, falling significantly short of expectations for a gain of 15.5% to 5.03 million units.
Existing home sales in October were revised down by nearly 14% to 4.25 million units from a previously reported 4.97 million.
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