Investing.com - The U.S. dollar was lower on Wednesday, amid fears that the Federal Reserve will increase interest rates higher than expected.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, slumped 0.21% to 95.16 as of 11:16 AM ET (15:16 GMT).
A recent increase in bond yields has been driven this week by positive data that showed the Fed will increase rates in December and beyond.
The yield on the benchmark United States 10-year note rose to 3.214% after reaching a seven-year high of 3.261% the day before, while the United States 30-Year Treasury bond was at 3.384%, not far from a four-year peak of 3.44%.
Meanwhile, the euro was higher due to the fall in the greenback, recovering from a selloff as Italy’s populist government and the European Commission went head-to-head over the country’s budget.
Brussels and Rome have been at odds over the country's budget deficit plans for the next three years, which breach EC rules on running excessive deficits and high debt.
EUR/USD was up 0.28% to 1.1522 compared to an earlier low of 1.1434.
The pound was higher, amid reports that 80% of the treaty between the UK and the European Union is done. GBP/USD rose 0.41% to 1.3197.
The dollar slid lower against the yen, with USD/JPY down 0.26% to 112.66. In times of uncertainty, investors tend to invest in the Japanese yen, which is considered a safe asset during periods of risk aversion.
The Australian dollar was lower, with AUD/USD falling 0.15% to 0.7092, while NZD/USD inched down 0.09% to 0.6469 and USD/CAD increased 0.36% to 1.2992.