The greenback relinquished some of yesterday's gains versus the euro and yen in the Wednesday session amid a dearth of US economic data. The calendar picks up on Thursday with several key reports including CPI, retail sales, weekly jobless claims and business inventories. The markets remain focused on sentiment over central bank rate decisions as comments from ECB officials continue to point toward at least one more rate hike.

GBP Recovers from Data Triggered Losses

The sterling has clawed back above the 1.96-handle against the dollar and back toward the 0.79-level versus the euro in early New York trading. The pound whipsawed lower overnight following lackluster economic data from the UK, which included the May claimant count, April ILO unemployment rate, and April trade balance. The unemployment claimant count rose to 9.0k in May, exceeding forecasts for 8.0k from 7.2k in April - marking its fourth monthly consecutive rise. The quarterly average earnings report fell to 3.8%, down from 4.0% from the previous year. Meanwhile, the trade deficit in April expanded to 7.594 billion pounds compared with forecasts for the deficit to shrink to 7.35 billion from 7.44 billion pounds in March.

The economic calendar from the UK for the coming session is light, with only the June RICS housing survey scheduled for release.

Cable bounced off sharply from the 1.95-region, recovering back above the 1.96-level to 1.9666. Interim resistance begins at 1.97, followed by 1.9740 and 1.98. Subsequent ceilings are seen at 1.9830, backed by 1.9860 and 1.99. On the downside, support is seen at 1.9620, followed by 1.96 and 1.9560. Additional floors are eyed at 1.9525, followed by 1.95 and 1.9470.

Yen slumps to 3 1/2 -month low

The yen fell to its lowest level since late February at 107.74 against the dollar in overnight trading, but has since recovered back near the 107-region. Upbeat economic data from Japan failed to prop the yen higher, with Q1 GDP up 1% versus calls for a 0.8% increase. The Bank of Japan will announce the results of its policy deliberation in the coming session. The BoJ is not seen changing rates and will likely issue a somber outlook on the economy despite yesterday's positive GDP surprise.