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Dollar broadly higher, euro near 9-month trough

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Investing.com -

Investing.com - The dollar was broadly higher against a basket of major currencies on Wednesday, while the euro slid back towards nine month lows ahead of Thursday's euro zone data on growth and inflation.

EUR/USD eased 0.12% to 1.3352, not far from the nine-month lows of 1.3332 reached a week ago.

The euro fell to lows of 1.3335 against the dollar on Tuesday after a report showed that investor confidence in Germany, the euro zone's largest economy, slumped to the lowest level since December 2012 this month.

The report said the decline in economic sentiment was likely connected to the impact of ongoing geopolitical tensions on the German economy. The ZEW also said the report indicated that economic growth in Germany will be weaker than expected in 2014.

The euro zone was to publish an inflation report as well as preliminary data on second quarter growth in the euro zone, Germany and France on Thursday, amid expectations for weak readings.

Weak data would add to pressure on the European Central Bank to implement fresh measures to shore up the recovery after it cut rates to record lows in June.

Elsewhere, the dollar advanced to one-week highs against the yen, with USD/JPY up 0.19% to 102.45.

The yen showed little reaction earlier Wednesday after official data showed that Japan's economy contracted by an annualized 6.8% in the second quarter, as a result of a sales tax increase which came into effect on April 1. Economists had forecast a contraction of 7.1%.

GBP/USD edged up 0.08% to 1.6825 ahead of the U.K. jobs report for July and the Bank of England's quarterly inflation report later in the session, while USD/CHF added 0.17% to trade at 0.9280.

The Australian dollar edged higher, with AUD/USD rising 0.16% to 0.9281. The New Zealand and Canadian dollars were little changed, with NZD/USD at 0.8428 and USD/CAD at 1.0923.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, eased up 0.11% to 81.65, near last week's 11-month peaks of 81.78.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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