Although the greenback traded on the back foot in Asia and European morning due to selloff in U.S. Treasury yields as well as rise in the single currency, dollar pared intra-day losses in New York on short-covering as investors remained cautious ahead of Thursday's U.S. inflation data. Sterling fell across the board on renewed Brexit concerns.
Versus the Japanese yen, dollar met renewed selling at 109.53 in Australia and fell to session lows of 109.23 in New York morning due to selloff in U.S. Treasury yields. However, the pair erased intra-day losses and rallied to 109.65 due to strong bounce in U.S. yields as well as cross-selling in jpy.
The single currency found renewed buying at 1.2172 in Australia and gained to 1.2185 in Asia. The pair then rallied to session highs of 1.2218 in New York morning on usd's weakness before retreating to 1.2175 on profit-taking and dollar's broad-based rebound.
The British pound went through a hectic session. Although cable rose from 1.4146 in Australia to 1.4190 (Reuters) in European morning, price erased intra-day gains and later fell to 1.4110 in New York due to renewed Brexit concerns before trading sideways.
Reuters reported the European Union warned Britain on Wednesday that it would react swiftly if Britain acted alone to change post-Brexit trading arrangements for Northern Ireland, but did not spell out what its steps might be. The European Union is also considering advancing its legal challenge to Britain over UK action in Northern Ireland, which could result in a court case by autumn or the eventual imposition of tariffs and quotas.
Data to be released on Thursday :
UK RICS housing price balance, Japan corporate goods price index, Australia consumer inflation expectations, France non-farm payrolls, industrial output, Italy industrial output, EU ECB refinancing rate, ECB deposit rate, and U.S. core CPI, CPI, real weekly earnings, initial jobless claims, continued jobless claims, Federal budget.
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