The dollar bounced back from yesterday's losses against is major competitors on Wednesday, following the release of some positive economic data. The second quarter GDP data was revised upward and was in line with the expectations of economists. Also, U.S. pending home sales for July surpassed expectations.
Investors continue to await Federal Reserve Chairman Ben Bernanke's speech at the Kansas City Federal Reserve Bank's annual symposium in Jackson Hole, Wyoming on Friday. European Central Bank President Mario Draghi announced yesterday that he will be unable to attend the symposium, due to heavy workload foreseen for the next few days.
The European Central Bank may have to adopt exceptional measures sometimes to fulfill its mandate of maintaining price stability, the bank's chief Mario Draghi said Wednesday, in what was seen as a response to German criticism of the central bank's bond purchases.
In an opinion piece published in the German weekly Die Zeit, Draghi said, "The ECB will do what is necessary to ensure price stability." "It will remain independent. And it will always act within the limits of its mandate," he added.
The message on the irreversibility of the euro is very important and policymakers should be careful not to create uncertainty while speaking out on the euro crisis, European Central Bank Governing Council member Erkki Liikanen was quoted as saying.
In an interview with Finnish daily Aamulehti, published Wednesday, Liikanen, who heads the Finnish central bank, suggested that ECB should be more transparent in decision making and should make more information public than was the case earlier.
Italy's borrowing costs for six months declined sharply to its lowest level since March at an auction on Wednesday as investor sentiment was boosted by hopes that the European Central Bank will resume the purchases of peripheral bonds that could bring down the country's bond yields.
The Italian Treasury raised the targeted EUR 9 billion by selling 6-month bills in today's auction. The strong demand for the country's debt was reflected in bids totaling EUR 15.244 billion. The yield on the 6-month paper tumbled to 1.585 percent from 2.454 percent paid in the previous sale on July 27.
The Spanish region of Catalonia sought a financial rescue from the government on Tuesday even as Prime Minister Mariano Rajoy repeated his earlier remarks that the country will not request for a full-blown international bailout.
Catalonia, the most indebted of Spain's 17 autonomous regions, requested for a EUR 5 billion bailout from the EUR 18-billion rescue fund, set up by Madrid to support its debt-ridden regions. Valencia was the first Spanish region to ask for a bailout, followed by Murcia.
The dollar declined to a 3-session low of $1.2575 versus the Euro yesterday, but has rebounded to around $1.2525 on Wednesday.
Germany's inflation based on the EU measure of consumer prices increased at a faster-than-expected rate in August, preliminary data released by Destatis showed Wednesday. The harmonized index of consumer prices (HICP) rose 2.2 percent year-on-year, following 1.9 percent gain in July. Economists were looking for an inflation figure of 2 percent.
France's business confidence increased slightly in August, after declining in the previous month, survey data released by the statistical office INSEE showed Wednesday. The manufacturing business confidence index edged up to 90 from 89 in July, revised from 90. The score matched economists' expectations.
The buck has held steady in comparison to the pound sterling Wednesday, continuing to hover around yesterday's low of $1.5835.
The greenback traded around Y78.482 versus the Japanese Yen Wednesday morning, but has since climbed to around $78.730.
U.S. economic growth in the second quarter of 2012 was stronger than initially reported but still fell short of the growth seen in the first quarter. According to figures released Wednesday by the Commerce Department, U.S. gross domestic product was upwardly revised to show a 1.7 percent increase in the second quarter, somewhat stronger than the 1.5 percent growth initially reported.
The upward revision, which was partly due to faster than previously estimated consumer spending growth, was in line with the expectations of most economists.
Pending home sales in the U.S. rose by more than expected in the month of July, according to a report released by the National Association of Realtors on Wednesday, with the pending home sales index reaching its highest level in over two years.
NAR said its pending home sales index rose by 2.4 percent to 101.7 in July after falling by 1.4 percent to 99.3 in June. Economists had been expecting the index to increase by about 1.0 percent.
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Forex News
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.