RTTNews - The dollar plunged versus most other major currencies on Wednesday, hurt by increased risk aversion as stocks soared on Wall Street following encouraging quarterly results from tech stalwart Intel.
The Dow was up for the third day in a row, while the S&P was up about 5% so far this week.
Even with some relatively tame inflation figures, the dollar was battered by the euro and continued its weekly downtrend against its Canadian counterpart.
Consumer prices climbed in June, led by sharp rise in energy prices. While the advance in core prices was slightly more than economists had expected, the figures remained relatively tame - easing some fears about inflation.
The U.S. Labor Department revealed that consumer prices climbed 0.7 percent in June compared to the previous month. In May, the figure was up 0.1 percent.
Economists had projected an advance of about 0.6 percent.
The dollar dropped to a 2-week low of 1.4124 versus the euro, moving to the upper end of a 2-month trading range. Traders have expressed little conviction about either the euro or dollar of late amid concerns about US spending and European monetary policy.
The dollar also extended this week's losses versus the sterling, slipping to a 2-week low of 1.6499. With the loss, the dollar moved closer to a 7-month low of 1.6744, set back in June.
Its been a brutal week for the dollar versus the loonie, dropping about 5 cents over the past four days. The buck fell to a 5-week low of C$1.1150 on Wednesday.
On the flip side, the dollar managed to pare some its recent losses versus the yen, rising to a weekly peak of 94.40. With the gain, the dollar moved away from a 5-month low of 91.74, set on Monday.
While the Federal Reserve released a report on Wednesday showing a continued decrease in industrial production in the month of June, the rate of decline slowed by more than economists had been anticipating.
The report showed that industrial production fell 0.4 percent in June following a revised 1.2 percent decrease in May.
Conditions for New York manufacturers were roughly flat in July, according to a report released by the Federal Reserve Bank of New York on Wednesday, with the index of activity in the sector rising to a level close to zero.
The New York Fed said its general business conditions index rose to a negative 0.6 in July from a negative 9.4 in June, with a negative reading indicating a contraction in activity.
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