Forexpros – The U.S. dollar dipped in early Asian trading on Wednesday as investors snapped up euros on hopes the debt crisis may wane there as well as Australian dollars on growth rates that illustrated an economy still on firm footing.
During early Asian trading, the greenback was down against the euro, with EUR/USD rising 0.06% to hit 1.3409.
A groundswell of optimism that European leaders will find a way out of the debt crisis at a summit to take place this Friday sent the euro extending earlier gains against the greenback.
A threat by the U.S. ratings agency Standard & Poor’s to downgrade the European Financial Stability Facility, which assists troubled euro zone countries, didn’t rattle markets too much.
Currency markets are eagerly awaiting a summit of European finance ministers this Friday after leaders expressed a willingness to agree to terms that would better coordinate fiscal activities among member nations.
Furthermore in Germany, factory orders were up 5.2% in October, surpassing market expectations of 1% and above September’s 4.6% decline, which also firmed the euro.
Europe’s gross domestic product grew 0.2% during the third quarter, in line with expectations, according to Eurostat, the statistical office of the European Union.
The greenback was also down against the pound, with GBP/USD rising 0.026% to hit 1.5603 as the U.K. currency bounced back from losses stemming from a British Retail Consortium report that showed November retail sales posting the largest annual drop in like-for-like sales since May, plunging 1.6% compared with a forecast for a more modest -0.5% decline.
Meanwhile, the greenback was down against the yen, with USD/JPY trading at 77.67, down 0.073%, while up against the franc, with USD/CHF trading up 0.049% at 0.9262.
In Australia, third-quarter gross domestic product data showed the economy expanded by 1% from the second quarter, slightly below forecasts for 1.2% expansion, but up 2.5% on year, which sent AUD/USD hitting 1.0267, up 0.215%, a day after Australian monetary policy authorities cut interest rates 25 basis points to spur more economic activity.
The greenback was weaker against its New Zealand counterpart, with NZD/USD gaining 0.013% to hit 0.7797, and also softer against the Canadian currency, with USD/CAD down 0.015% at 1.0097.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.08% at 78.57.
On Wednesday, the U.S. will unveil its gasoline and crude oil inventories and on Thursday, the U.S. government will release initial jobless claims, which measures the number of people filing for unemployment insurance for the first time during the past week.
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