Investing.com - The dollar pared gains against the yen on Wednesday, pulling back from two-and-a-half year highs after preliminary data showed that the U.S. economy contracted unexpectedly in the three months to December.
During European afternoon trade, the dollar pulled back from two-and-a-half year highs against the yen, with USD/JPY up 0.52% to 91.16, down from a session high of 91.41.
The Commerce Department said the economy contracted by 0.1% in the fourth quarter, defying expectations for growth of 1.1% and a sharp slowdown from growth of 3.1% in the preceding quarter.
A separate report showed that the U.S. private sector added 192,000 jobs in January, above expectations for an increase of 165,000.
Market participants were looking ahead to the outcome of the Federal Reserve’s latest policy setting meeting later in the trading day. The U.S. central bank was expected to reaffirm its commitment to its easing program until the unemployment rate falls below 6.5%.
In Japan, Prime Minister Shinzo Abe rejected criticism that Japan’s fiscal and monetary stimulus program was aimed at weakening the yen on Wednesday, saying the measures were aimed at combating deflation.
The greenback was at 14-month lows against the euro, with EUR/USD advancing 0.46% to 1.3553 as sentiment on the single currency continued to be underpinned by indications that the worst of the crisis in the euro zone is over.
The euro shrugged off data showing that Spain’s economy contracted by 0.7% in the three months to December, bringing the annualized rate of contraction to a larger-than-forecast 1.8%.
The greenback hit session lows against the pound, with USD/GBP up 0.22% to 1.5796.
Sterling found support after data showed that net lending to individuals in the U.K. rose to the highest level since April last month, while mortgage approvals rose to 56,000 from 54,000 in November.
The dollar extended losses against the Swiss franc, with USD/CHF down 0.65% to 0.9153.
The greenback was broadly higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD rising 0.22% to 1.0031, AUD/USD falling 0.47% to 1.0424 and NZD/USD skidding 0.84% to 0.8322.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.22% to 79.42.
Elsewhere, Italy saw borrowing costs fall sharply at an auction of five- and 10-year government bonds on Wednesday, with the yield on 10-year bonds falling to 4.17%, the lowest since October 2010.
During European afternoon trade, the dollar pulled back from two-and-a-half year highs against the yen, with USD/JPY up 0.52% to 91.16, down from a session high of 91.41.
The Commerce Department said the economy contracted by 0.1% in the fourth quarter, defying expectations for growth of 1.1% and a sharp slowdown from growth of 3.1% in the preceding quarter.
A separate report showed that the U.S. private sector added 192,000 jobs in January, above expectations for an increase of 165,000.
Market participants were looking ahead to the outcome of the Federal Reserve’s latest policy setting meeting later in the trading day. The U.S. central bank was expected to reaffirm its commitment to its easing program until the unemployment rate falls below 6.5%.
In Japan, Prime Minister Shinzo Abe rejected criticism that Japan’s fiscal and monetary stimulus program was aimed at weakening the yen on Wednesday, saying the measures were aimed at combating deflation.
The greenback was at 14-month lows against the euro, with EUR/USD advancing 0.46% to 1.3553 as sentiment on the single currency continued to be underpinned by indications that the worst of the crisis in the euro zone is over.
The euro shrugged off data showing that Spain’s economy contracted by 0.7% in the three months to December, bringing the annualized rate of contraction to a larger-than-forecast 1.8%.
The greenback hit session lows against the pound, with USD/GBP up 0.22% to 1.5796.
Sterling found support after data showed that net lending to individuals in the U.K. rose to the highest level since April last month, while mortgage approvals rose to 56,000 from 54,000 in November.
The dollar extended losses against the Swiss franc, with USD/CHF down 0.65% to 0.9153.
The greenback was broadly higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD rising 0.22% to 1.0031, AUD/USD falling 0.47% to 1.0424 and NZD/USD skidding 0.84% to 0.8322.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.22% to 79.42.
Elsewhere, Italy saw borrowing costs fall sharply at an auction of five- and 10-year government bonds on Wednesday, with the yield on 10-year bonds falling to 4.17%, the lowest since October 2010.