Dollar lower vs. euro, rises vs. yen before Bernanke

Shutterstock photo - The dollar was lower against the euro and gained ground against the yen on Wednesday as market sentiment was supported by hopes for a solution on a bailout deal for Cyprus and investors awaited comments by Federal Reserve Chairman Ben Bernanke later in the day.

During U.S. morning trade, the dollar pulled away from four-month highs against the euro, with EUR/USD climbing 0.51% to 1.2947.

In Cyprus, the government held crisis talks aimed at finding an alternative plan to raise EUR5.8 billion after the parliament rejected a proposed bank deposit tax, a condition of a EUR10 billion international bailout deal.

Elsewhere, the dollar strengthened against the yen, with USD/JPY rising 0.35% to 95.50.

Haruhiko Kuroda took over his role as Bank of Japan governor together with his two deputies on Wednesday, amid expectations that the bank's new leadership will implement more aggressive monetary easing measures aimed at combating deflation.

The greenback was lower against the pound, with GBP/USD up 0.21% to 1.5129.

In the U.K., Chancellor George Osborne halved the forecast for economic growth in 2013 to 0.6% down from a previous forecast of 1.2% as he delivered the government's annual budget statement.

Osborne also said he was changing the Bank of England's remit to allow it to use "unconventional monetary instruments" to support the economy while keeping inflation stable.

Earlier Wednesday, the minutes of the BoE's March meeting showed that policymakers remained split over more easing.

The BoE minutes showed that three policymakers, including Governor Mervyn King, voted in favor of more quantitative easing, unchanged from the February meeting.

Meanwhile, official data showed that the claimant count in the U.K. fell by a seasonally adjusted 1,500 in February, compared to expectations for a decline of 5,000, while the unemployment rate remained unchanged at 7.8%.

The dollar was weaker against the Swiss franc, with USD/CHF down 0.35% to 0.9434.

The greenback was mixed against its Canadian, Australian and New Zealand counterparts, with USD/CAD dipping 0.03% to 1.0264, AUD/USD rising 0.23% to 1.0393 and NZD/USD losing 0.19% to trade at 0.8231.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.33% to 82.88.

Investors were looking ahead to the outcome of the Federal Reserve's policy meeting later in the trading day, after data last week showing that U.S. inflation was contained left the way clear for the bank to continue its asset purchase program.

Fed Chairman Ben Bernanke was to give a press conference after the release of the bank's policy statement. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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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.

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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