Dollar slips vs. euro, higher vs. yen amid hopes for Cyprus deal

Shutterstock photo - The dollar was lower against the euro on Wednesday and pushed higher against the yen as market sentiment was supported by hopes that a solution on a bailout deal for Cyprus would be found after the parliament rejected a controversial bank deposit tax.

During European late morning trade, the dollar pulled away from four-month highs against the euro, with EUR/USD rising 0.28% to 1.2917.

The euro found support amid optimism that another solution would emerge after the Cypriot parliament voted against a levy on bank deposits late Tuesday, throwing the future of a EUR10 billion international bailout deal into doubt.

Following the vote, the European Central Bank said it will provide liquidity to Cypriot banks within existing rules.

The dollar gained ground against the yen, with USD/JPY rising 0.27% to 95.42.

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 rising 0.19% to 1.5126.

In the U.K., the minutes of the Bank of England's March meeting showed that policymakers remained split over more easing, while elsewhere data showed that the U.K. unemployment rate held steady February.

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

Meanwhile, the Office for National Statistics said that the U.K. claimant count fell by a seasonally adjusted 1,500 in February, compared to expectations for a decline of 5,000.

The rate of unemployment held steady at 7.8% last month, in line with expectations and unchanged from January.

The dollar slipped lower against the Swiss franc, with USD/CHF down 0.11% to 0.9457.

The greenback was mixed against its Canadian, Australian and New Zealand counterparts, with USD/CAD down 0.20% to 1.0246, AUD/USD rising 0.18% to 1.0388 and NZD/USD losing 0.28% to trade at 0.8223.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.15% to 83.02.

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.

Also Wednesday, U.K. Chancellor George Osborne was to deliver the annual budget in a statement to parliament, and was also likely to revise down forecasts for growth. - 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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