Risk aversion propped the dollar higher against the majors in Wednesday trading amid a retreat in the global equity markets - with Shanghai's Composite Index plummeting by 5% overnight. Commodities also slumped with gold falling to its lowest level in 2-weeks just above the $927 per ounce level and crude oil sliding to below $64 per barrel. The greenback pushed the euro toward the 1.40-figure and the Swiss franc around the 1.09-handle.

US economic reports released this morning saw durable goods orders decline sharply in June, posting a monthly decline of 2.5% versus a downwardly revised increase of 1.3% from May. The excluding transports durable goods orders improved to 1.1% compared with a downwardly revised 0.8% increase a month prior. The Fed's Beige Book revealed the pace of economic decline had moderated or stabilized at a low level in most districts adding that the manufacturing sector remained subdued but slightly more positive than in the past. The Fed said there was still slack in the labor markets, with most sectors reducing jobs or holding steady and net employment falling.

Meanwhile, NY Fed President Dudley expressed optimism over the economy, saying he expects moderate growth in the second half of this year, albeit considerably slower than in past recoveries. Dudley said the balance of risks is still tilted toward weakness in growth and employment and not toward higher inflation, suggesting that the Fed will likely maintain low interest rates for some time to come. Lastly, he said that if the recovery does, in fact, turn out to be lackluster, the unemployment rate is likely to remain elevated and capacity utilization rates unusually low in the near-term.

Euro Tumbles to 1.40

The euro plummeted to a 2-week low just above the 1.40-figure as traders dumped riskier assets in favor of safe-haven currencies. In the coming session, economic data from the Eurozone consist of Germany's July unemployment rate, unemployment change, Eurozone economic sentiment, business climate and consumer sentiment.

With the EURUSD pair failing to break above the upper range of its consolidation above the 1.43-level, the single currency could drift towards the lower trendline in the coming weeks, which rests near the 1.3930-figure.