Risk appetite remained low ahead of the U.S. corporate Q1 earnings and investors sold greenback against the yen on Wednesday, with volatile U.S. stock markets also increased safe-haven appeal of the Japanese yen. In late New York session, U.S. dollar traded lower at 99.60 versus the yen while Dow Jones Industrial average ended up 47 points to 7,837.
Earlier in the day, the single currency came under pressure after Ireland reported its budget deficit soar more than three times the European Union limit to 10.8 percent of gross domestic product this year, even after the government announced a plan to cut spending and increase taxes. The euro fell to a session low of 1.3147 versus the dollar and 0.8960 against the sterling before rebounding, touched session highs of 1.3309 and 0.9050 respectively in New York afternoon session before retreating.
In other European currency, the British pound hovered inside intra-day range of 1.4635-1.4750 against the dollar on Wednesday as investors await a policy decision by the BOE on Thursday, at which the central back is expected to leave U.K. interest rate on hold at 0.5 percent.
Minutes of the FOMC showed that Federal Reserve officials agreed at their March 17-18 meeting that ‘substantial additional purchases’ of a range of longer-term assets was appropriate to deal with a steep drop in economic activity.
On the data front, Economy Ministry in Berlin showed that decline in German factory orders was larger than economists median forecast in February, posting a monthly drop of 3.5 percent and 38.2 percent from a year earlier after seasonal swings and inflation adjustment. Other reports from U.S. showed that sales at U.S. wholesalers rose in February for the first time in eight months, contributing to a record drop in inventories that indicates distributors are well on the way to eliminating the glut in stockpiles. Inventories at wholesalers posted a decline of 1.5 percent versus the consensus forecast of a decrease of 0.7 percent
Economic data releases on Thursday include Japan Machine orders, Australia unemployment data, Switzerland’s unemployment rate, German CPI data, industrial production and HICP data, U.K trade balance, PPI data and BOE rate decision, Canada unemployment rate, jobs-change and trade balance and New housing price index.