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Forex - Dollar drops vs. rivals as Euro, Pound gain on rate view

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Forex Pros - The U.S. dollar was broadly lower against its major counterparts on Wednesday, as the euro and pound advanced on growing speculation the European Central Bank and the Bank of England would hike interest rates to curb inflation.

During European morning trade, the greenback was down against the euro, with EUR/USD jumping 0.61% to hit a three-week high of 1.3735, after European Central Bank policymakers indicated the central bank could raise rates to tame inflation.

The greenback was also down against the pound, with GBP/USD surging 0.73% to hit a three-month high of 1.6255.

Earlier in the day, the minutes of the February 10 BoE policy meeting revealed that the bank's chief economist Spencer Dale joined Andrew Sentance and Martin Weale in voting for higher rates, moving the BoE closer to tightening policy in the face of accelerating inflation.

Elsewhere, the greenback was up against the yen but down against the Swiss franc, with USD/JPY adding 0.04% to hit 82.80 and USD/CHF slumping 0.13% to hit 0.9377.

Meanwhile, the greenback was down against its Canadian, New Zealand and Australian counterparts, with USD/CAD shedding 0.14% to hit 0.9889, NZD/USD climbing 0.15% to hit 0.7476 and AUD/USD rising 0.52% to hit 1.0041.

Earlier in the day, Moody's Investors Service said it saw no immediate impact from the Christchurch earthquake on New Zealand's Aaa credit rating.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.48%.

Later in the day, ECB President Jean-Claude Trichet was to speak at a public engagement in Belgium, while the U.S. was to publish industry data on existing home sales.

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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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