Forex - Dollar up on U.S. fiscal doubts, Japanese inflation comments
Published Jan 09, 2013 03:28PM ET
Calls for higher inflation targets in Japan sent the greenback rising as did softer-than-expected German output data.
In U.S. trading on Wednesday, EUR/USD was down 0.20% at 1.3055.
German industrial production rose 0.2% in November, according to official data, missing market expectations for a 1.0% increase.
German industrial production fell 2.9% on year in November, in line with expectations.
On Tuesday, the German government reported that factory orders fell 1.8% in November, outpacing market expectations for a 1.4% decline thanks in part to slumping overseas demand for the country's goods and services.
Elsewhere, final data showed that the eurozone economy contracted 0.1% in the third quarter, in line with preliminary estimates as well as market expectations.
The greenback saw added safe-haven demand as markets began to brace for fourth-quarter earnings, which have already begun hitting the wire, and for congressional debates over terms to raise the U.S. government's debt ceiling.
The U.S. government will hit its USD16.4 trillion borrowing limit likely by the end of February, and Congress must lift the spending ceiling in order to prevent defaults on government obligations.
When the government last hit its debt ceiling in 2011, lawmakers waited until the final hour to lift it, roiling markets in the process and fueling strong safe-haven demand for the greenback shortly afterwards.
Fears of a repeat performance in February sparked cautionary dollar demand on Wednesday.
The greenback, meanwhile, was up against the pound, with GBP/USD trading down 0.22% at 1.6020.
The dollar strengthened against the yen after Japanese Prime Minister Shinzo Abe asked the Bank of Japan to double an inflation target to 2%, with USD/JPY up 0.92% at 87.85.
The dollar, meanwhile, was up against the Swiss franc, with USD/CHF trading up 0.16% at 0.9257.
The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.10% at 0.9877, AUD/USD up 0.06% at 1.0509 and NZD/USD trading up 0.25% at 0.8387.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.34% at 80.68.
On Thursday, the U.S. is to publish the weekly government report on initial jobless claims.
Get The News You Want
Written By: Investing.com
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.