The U.S. dollar rallied against the broadly weaker yen on
Wednesday, but turned lower against the euro, as speculation that aid payments
for Greece could be bundled into one large lump sum supported the single
currency.
The euro remained supported after German newspaper Bild reported
Tuesday that Greece could receive three bailout installments in one single
payment of EUR44 billion, citing German government
sources.
The
euro hit session highs against the greenback earlier after Italy saw borrowing
costs fall to the lowest level since October 2010 at an auction of three-year
government bonds. In addition to that, the Italian 10-year
government bonds advanced for a second day as borrowing costs fell as the nation
sold 5 billion euros ($6.4 billion) of debt. Italy auctioned 3.5 billion euros
of notes due in 2015 and a total of 1.5 billion euros of 2023 and 2029 bonds,
the latter being the longest maturity the nation has sold this
year.
But concerns that the economic outlook for the euro zone is worsening were underlined after official data showed that industrial production in the bloc tumbled 2.5% in September, compared to expectations for a 1.9% decline.
But concerns that the economic outlook for the euro zone is worsening were underlined after official data showed that industrial production in the bloc tumbled 2.5% in September, compared to expectations for a 1.9% decline.
Meanwhile, the Bank of England’s quarterly inflation report said
that it will take until the third quarter of 2014 before inflation will fall
below the bank’s 2% target, nine months longer than the bank forecast in August
and added that growth looked likely to remain
sluggish.
As the Bank of England Governor Mervyn King said, the U.K. economy
may shrink in the current quarter and its recovery will be subdued, prompting
officials to keep open the option of further asset purchases to aid
growth.
Earlier Wednesday, official data showed that the number of people in the U.K. claiming unemployment benefits rose by 10,100 in October, the largest increase since September 2011, but the unemployment rate ticked down to 7.8% from 7.9% in September.
Earlier Wednesday, official data showed that the number of people in the U.K. claiming unemployment benefits rose by 10,100 in October, the largest increase since September 2011, but the unemployment rate ticked down to 7.8% from 7.9% in September.
In the U.S., retail sales fell in October for the first time in
four months, influenced by the effects of superstorm Sandy, which hurt receipts
for some and helped for others. The 0.3 percent drop followed a 1.3 percent
increase in September that was larger than previously reported, Commerce
Department figures showed today in Washington.
Furthermore, wholesale prices in the U.S. unexpectedly fell in
October for the first time in five months as energy and vehicle costs dropped.
The 0.2 percent decline in the producer price index came after a 1.1 percent
increase the prior month, Labor Department figures showed today in
Washington.
Later Wednesday, the Federal Reserve is to publish the minutes of
its most recent policy-setting meeting.
