Wednesday during early Asian deals, the US dollar climbed against the European majors as concerns about the global economy prompted investors to seek the safety of the world's most liquid currency.

Stocks across the Asia-Pacific fell today as traders expressed some anxiety about the upcoming earning season as the big earnings drops from Alcoa rekindled worries that the world's largest economy will not move soon out from the recession. The dollar and the yen often strengthen in times of economic uncertainty as investors opt for low yielding currencies.

In early trading, Australia's benchmark S&P/ASX 200 index is losing 51 points or 1.37% to 3,656 and Japan's key Nikkei index opened weaker at 8,747 compared to its previous close of 8,833, is currently trading at 8,658, down 174.59 points. These markets are trading taking cues from the Wall Street where, the Dow closed down 186.29 points or 2.3% at 7,790, while the Nasdaq closed down 45.10 points or 2.8% at 1,562 and the S&P 500 closed down 19.93 points or 2.4% at 816.

The dollar strengthened in Wednesday's early dealing versus the euro and climbed to a 1-week high of 1.3179. If the dollar rises further, 1.31 is seen as the next likely target level. The euro-dollar pair closed Tuesday's deals at 1.3273.

The US currency rallied to a high of 1.4665 against the pound during Wednesday's early trading, compared to 1.4734 hit late yesterday in New York. On the upside, the next likely target for the US dollar is seen around the 1.445 level.

The pound has been weakening against the most major currencies as UK consumer confidence tied to a record low in March. Nationwide said that an index measuring consumer confidence in the United Kingdom posted a record low reading of 41. That was lower than analyst expectations for a score of 45 after the index came in at 43 in February.

Pound's losses compounded further as a study released by the National Institute of Economic and Social Research said that the economy of Great Britain contracted by an estimated 1.5 percent in the first three months of 2009. The Institute's estimate was slightly lower than the 1.6 percent contraction officially recorded for the final quarter of 2008.

Against the currency of Switzerland, the US dollar spiked up during Wednesday's early trading. The dollar-franc pair edged up to 1.1483 by about 10:55 pm ET, a tad lower than yesterday's new multi-day high of 1.1485. At yesterday's New York session close, the pair was quoted at 1.1427. If the greenback rises further, 1.15 is seen as the next upside target level.

In the European session, the German February trade balance report, Bank of France business sentiment, British retail consortium shop price index and German Factory orders reports are expected.

At the same time, the dollar weakened versus the yen due to across the board rallying of the latter on the back of weak equities. As a result, the dollar dropped to 100.01 against the yen. If the dollar moves down further, it may test support around the 99.3 level.

In economic news from Japan, the Ministry of Finance said in a preliminary report that current account balance in Japan swung to a surplus in February, coming in at 1.116 trillion yen.

That's down 55.6 percent on year, even though it beat expectations for a surplus of 1.071 trillion yen following the record 172.8 billion yen shortfall in January. The current account surplus was 125.4 billion yen in December, 581.2 billion yen in November and 960.5 billion yen in October.

Japanese bankruptcies data, Bank of Japan monthly report and eco watchers survey are scheduled to be released at 1:00 am ET.

From US, the Commerce Department is due to release its wholesale inventories report at 10 am ET. Economists expect wholesale inventories at the end of February to show a 0.6% decline. Half an hour later, the Energy Information Administration is scheduled to release its weekly petroleum inventory report.

At 2:00 pm ET, the Federal Reserve is scheduled to release the minutes of its March 17th-18th meeting. Along with an announcement to keep interest rates unchanged at exceptionally low levels following its two-day FOMC meeting in March, the Fed said it would purchase $300 billion worth of longer-term securities over the next 6 months. Additionally, the Fed said it will buy an incremental $750 billion worth of mortgage-backed securities and $100 billion of government sponsored enterprises - GSE debt. The Fed also said it intends to add $100 billion to its purchases of agency debt.

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