Investing.com - The dollar pared gains against the yen on
Wednesday, pulling back from two-and-a-half year highs after
preliminary data showed that the U.S. economy contracted
unexpectedly in the three months to December.
During European afternoon trade, the dollar pulled back from
two-and-a-half year highs against the yen, with USD/JPY up 0.52% to
91.16, down from a session high of 91.41.
The Commerce Department said the economy contracted by 0.1% in the
fourth quarter, defying expectations for growth of 1.1% and a sharp
slowdown from growth of 3.1% in the preceding quarter.
A separate report showed that the U.S. private sector added 192,000
jobs in January, above expectations for an increase of 165,000.
Market participants were looking ahead to the outcome of the
Federal Reserve's latest policy setting meeting later in the
trading day. The U.S. central bank was expected to reaffirm its
commitment to its easing program until the unemployment rate falls
In Japan, Prime Minister Shinzo Abe rejected criticism that Japan's
fiscal and monetary stimulus program was aimed at weakening the yen
on Wednesday, saying the measures were aimed at combating
The greenback was at 14-month lows against the euro, with EUR/USD
advancing 0.46% to 1.3553 as sentiment on the single currency
continued to be underpinned by indications that the worst of the
crisis in the euro zone is over.
The euro shrugged off data showing that Spain's economy contracted
by 0.7% in the three months to December, bringing the annualized
rate of contraction to a larger-than-forecast 1.8%.
The greenback hit session lows against the pound, with USD/GBP up
0.22% to 1.5796.
Sterling found support after data showed that net lending to
individuals in the U.K. rose to the highest level since April last
month, while mortgage approvals rose to 56,000 from 54,000 in
The dollar extended losses against the Swiss franc, with USD/CHF
down 0.65% to 0.9153.
The greenback was broadly higher against its Canadian, Australian
and New Zealand counterparts, with USD/CAD rising 0.22% to 1.0031,
AUD/USD falling 0.47% to 1.0424 and NZD/USD skidding 0.84% to
The dollar index, which tracks the performance of the greenback
versus a basket of six other major currencies, was down 0.22% to
Elsewhere, Italy saw borrowing costs fall sharply at an auction of
five- and 10-year government bonds on Wednesday, with the yield on
10-year bonds falling to 4.17%, the lowest since October 2010.
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