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Forex - Dollar mostly lower despite tapering

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Investing.com - " The U.S. dollar traded lower against most of its major rivals during Wednesday's Asian session despite escalating talk that the Federal Reserve could move to taper its USD85 billion-per-month bond-buying effort sooner than some market participants had hoped.

In Asian trading Wednesday, EUR/USD rose 0.07% to 1.3487 after euro zone's industrial producer price index slipped 0.9% in September from a year earlier, after dropping 0.8% in August, worse than market calls for a 0.7% contraction.

Industrial producer prices rose 0.1% in September from August, below consensus forecasts for 0.2% expansion. The weak euro zone data is seen as putting pressure on the European Central Bank to lower rates when it meets later this week. ECB's benchmark rate is currently 0.50%.

On Wednesday, the euro zone is to release data on retail sales.

USD/JPY inched down 0.01% to 98.51. In U.S. economic news out Tuesday, the Institute of Supply Management said its non-manufacturing purchasing managers' index rose to 55.4 in October from 54.4 in September, beating forecasts for a 54.0 reading. Readings above 50 indicate expansion.

GBP/USD advanced 0.15% to 1.6058 after data showed that activity in the U.K. services sector expanded at the fastest rate in 16 years in October.

Markit said the U.K. services purchasing managers index rose to 62.8 in October up from 60.3 in September, the sharpest rise in activity since May 1997. Economists had been expecting the index to tick down to 59.8.

USD/CHF fell 0.07% to 0.9131 while USD/CAD inched down 0.02% to 1.0453 despite U.S. oil inventories data that disappointed markets.

AUD/USD fell 0.05% to 0.9505. Earlier Wednesday, the Australian Bureau of Statistics said the country's trade deficit narrowed to AUD284 million in September from AUD693 million in August. Economists expected a September deficit of AUD500 million.

Market observers believe the shrinking deficit is evidence of the mining sector continuing to support the world's 12th-largest economy and that there is a possibility of a small surplus early next year.

NZD/USD nudged down 0.02% to 0.8364 after Statistics New Zealand said the country's employment change rose 1.2% in the third quarter after a second-quarter increase of 0.4%. Economists expected a third-quarter increase of 0.6%.

New Zealand's unemployment rate fell to 6.2% in the third quarter from 6.4% in the prior quarter. Economists expected a third-quarter reading of 6.3%.

Statistics New Zealand added that New Zealand's labor cost index was unchanged at 0.4% last quarter. Economists expected a third-quarter reading of 0.5%.

The U.S. Dollar Index fell 0.13% to 80.69.

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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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