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Dollar off lows vs. yen, euro gains ground

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Investing.com - The U.S. dollar pulled back from session lows against the yen on Wednesday, while the euro pushed higher against the dollar following remarks by a senior European Central Bank policymaker.

During European late morning trade, the dollar trimmed losses against the yen, with USD/JPY down 0.59% to 88.25, up from a session low of 87.80.

The yen turned lower after Kazumasa Iwata, widely regarded as a frontrunner for the next Bank of Japan governor, said quantitative easing was an effective way to combat deflation.

The greenback erased gains against the euro, with EUR/USD rising 0.12% to 1.3319.

The euro found support after senior ECB policymaker Ewald Nowotny said the euro exchange rate was "not a matter of major concern."

The euro hit session lows earlier after Jean-Claude Juncker, the head of the euro group of finance ministers, said Tuesday that the euro's value was "dangerously high" and posed a threat to the recovery in the euro zone.

Safe haven demand continued to be supported after the World Bank cut its forecast for global growth to 2.4% this year from 3% in June and warned that developing nations would struggle in 2013.

The greenback was slightly higher against the pound, with GBP/USD down 0.12% to 1.6046.

The greenback was lower against the Swiss franc, with USD/CHF shedding 0.34% to trade at 0.9287.

The Swiss franc was little changed after official data showed that retail sales in Switzerland rose by an annualized 2.9% in November, missing expectations for a 3.2% gain.

The greenback was little changed against its Canadian, Australian and New Zealand counterparts, with USD/CAD adding 0.13% to trade at 0.9854, AUD/USD dipping 0.08% to 1.0556 and NZD/USD inching down 0.02% to 0.8395.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, slipped 0.12% to 79.67.

The U.S. was to release official data on consumer inflation and industrial production later in the trading day.

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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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