The US dollar dipped against the euro and yen on Wednesday after data showed another month of steep US job losses, though the move was capped as investors are watching leaders from the G20 countries meeting in London to see whether they can adopt coordinated measures to ward off a deeper global slump. Expectations surrounding this meeting are keeping the greenback from a more negative reaction to a report from ADP Employer Services showing the United States shed another 742,000 private sector jobs in March, more than economists were expecting. The dollar tends to rally on bad economic news because it attracts safe-haven flows from higher-yielding currencies and assets such as stocks.

The euro fell against the yen as a report showed Europe’s jobless rate climbed in February to the highest level in almost three years, adding to evidence the region’s recession is worsening. Europe’s single currency also fell to the lowest level in two weeks against the pound as German retail sales unexpectedly dropped in February and Europe’s manufacturing contracted last month more than previously estimated. Expectations in the market are for ECB to cut interest rates by 50 basis points to 1 percent on Thursday.

The British pound strengthened the most against the euro in more than a week after a report showed a UK manufacturing index climbed in March to the highest level in five months. The sterling also rose for a second day versus the dollar as world leaders arrived today for the Group of 20 summit in London, where they aim to formulate plans to overcome the global recession.

The Japanese yen strengthened against the US dollar on Wednesday after data showed private US employers cut another 742,000 jobs in March. The Japanese yen and greenback tend to outperform on bad economic news because they attract safe-haven flows from higher-yielding currencies and assets.

The Canadian dollar was pushed lower versus the US dollar on Wednesday on the back of the weakening oil price and equity markets, while soft US jobs data also weighed. Oil prices fell nearly 4 percent to below $48 a barrel, while North American equity markets opened lower. The Canadian dollar has tended to track both markets lately, partly as a barometer of risk.

The Australian dollar dipped on Wednesday after retail sales slumped by the most in nine years in February and investors returned to a view that Australia's central bank may have to cut interest rates next week. The surprising 2 percent dive in retail sales and a renewed rise in aversion to riskier high yielding currencies on worries about global economic health, have prompted markets to only expect a 25-basis-point rate cut. The New Zealand dollar fell more than 2 percent on Wednesday following a central bank warning on high market rates and its reiteration that it will keep benchmark interest rates low for some time.

Indicative rates:

EUR/USD 1.3281

USD/JPY 98.60

GBP/USD 1.4400

USD/CAD 1.2614

USD/MXN 13.9770

USD/CHF 1.1413

AUD/USD 0.6979

NZD/USD 0.5650

USD/DKK 5.6177

USD/SEK 8.2100

USD/NOK 6.7301

USD/TWD 33.780

USD/CNY 6.8309

10-Year Treasury Note Yield: 2.683%

Dow Jones Industrial Average: 7,654.00 + 45.16