RTTNews - The dollar fell sharply versus other major currencies on Wednesday as stocks steadied, causing traders to seek riskier higher-yielding assets like the euro and sterling.
Its been a topsy turvy week for the dollar, which stabilized after hitting 2009 lows earlier in the month, only to give back a big portion of its recent gains today.
Traders poured over economic news from across the Atlantic, but with no first-tier data from the US to consider, the currencies were primarily influenced by the tug of war between the bears and bulls on Wall Street.
The buck slipped to 1.4260 versus the euro, moving back towards an 8-month low from early in August. German producer prices dropped at a record pace in July, falling for the fifth month in a row.
The tame inflation data caused traders to shrug off comments from European Central Bank Governing Council member Axel Weber, who said the 0.3% growth in German gross domestic product or GDP in the second quarter is due to government stimulus measures and loose monetary policy.
In an article in the German weekly Die Zeit, Weber, who also heads Bundesbank, wrote that it is too early to declare that the recovery is sustainable.
The dollar gave back its overnight gains versus the sterling, slipping back to 1.6540. The pair has shown little direction since the dollar recovered from a 10-month low of 1.7012, set a few weeks ago.
All nine voting members of the Bank of England wanted to increase the size of the asset purchase programme, but they were split over the amount to be increased, the minutes of the last policy making meeting showed Wednesday.
Six members of the MPC voted to raise the size of asset purchases by GBP 50 billion, while the other three members sought a GBP 75 billion increase to GBP 200 billion.
The dollar remained under pressure versus the yen, falling to a monthly low of 93.66. The dollar has been drifting steadily lower since hitting a summertime high of 97.77 two weeks ago.
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