The dollar was mixed in the New York session; firmer against the euro toward the 1.39-region and weaker versus the yen near the 94-figure. The dearth of US economic data out today will keep the focus on stocks, which were marginally higher in early Wednesday trading as earnings season kicks off in earnest.

Euro Drifts Lower

The euro tumbled against the yen and dollar overnight, falling to 130.44 and 1.3861, respectively. The equity markets are still the key drivers of foreign exchange movements with lingering questions over the global economic recovery and bouts of heightened risk aversion dictating sentiment.

Economic reports released overnight from the Eurozone were mixed with revised Q1 GDP sharply worst than the preliminary figures. The report showed a sharp contraction in first quarter economic activity with GDP lower by 2.5% on a quarterly basis compared with an initial reading of a 1.8% decline, while the annualized growth figures showed a contraction of 4.9% versus a 1.7% contraction previously reported. Germany's May industrial output posted its strongest surge in nearly 16-years, advancing by 3.7% compared with a downwardly revised 2.6% decline in April.

EURUSD edged back above the 1.39-figure following a higher open in the US equity bourses. Resistance starts at 1.3940, followed by 1.3975 and 1.40. Subsequent ceilings are eyed at 1.4050, backed by 1.41 and 1.4130. A breach beneath 1.39 will encounter support at 1.3860, followed by 1.3820 and 1.38. Subsequent floors will emerge at 1.3770, backed by 1.3740 and 1.37.

Yen posts Safe-Haven Gains

The yen rallied in Wednesday trading, climbing to its highest level since the end of May against both the euro and dollar. Safe-haven flows were the predominant catalyst for the advance in the Japanese currency with the Nikkei index plunging by 2.4% below the psychologically key 9500-level to 9420.75. Dragging the Tokyo index lower were a series of soft Japanese economic reports, suggesting that global economic downturn continues to weigh on the economy.

The current account surplus fell by 34.2% in May versus a 22.1% decline a year before. Meanwhile, core machinery orders tumbled by 3.0% in May to a record low, sharply missing consensus estimates for a 2.0% decline.

USDJPY trades just above the 94-figure, with support seen at 93.80 - the low from May 22nd, followed by 93.50 and 93. Additional floors will emerge at 92.60, backed by 92.30 and 92. On the upside, gains will encounter resistance at 94.50, followed by 94.75 and 95. Subsequent ceilings are seen at 95.40, backed by 95.80 and 96.