The dollar is currently losing ground against all of its major competitors Wednesday, as the risk appetite of investors increases. Equity markets are rising at mid-week, extending recent gains. Some better than expected economic data from both China and Germany are helping to drive equities higher.
European Central Bank Executive Board member Jorg Asmussen said Wednesday that short-term risks faced by Cyprus remained high with deep recession expected to take a toll on the banks' balance sheets.
In an introductory statement before the European Parliament's Economic and Monetary Affairs Committee in Brussels, Asmussen warned that the banking sector has not yet been stabilized, despite the unprecedented steps taken by the authorities so far.
"The burden sharing arrangement negatively affected depositor confidence and required the introduction of temporary and proportionate capital controls and restrictions on deposit withdrawals," he said.
Asmussen also cautioned that the reliance of the country's largest bank on ECB's Emergency Liquidity Assistance (ELA) remained "exceptionally high." He called for firm steps to complete the financial sector reform so as "to rebuild confidence in the viability of the banking system."
The dollar traded around the $1.3080 level against the Euro yesterday, but has dropped to a 4-session low of $1.3193 on Wednesday.
Germany's industrial output unexpectedly increased in March as all of the major industrial sub-groups recorded growth, in a sign that that the economy likely avoided further contraction in the first quarter. Industrial production increased a seasonally adjusted 1.2 percent sequentially in March, after gaining a revised 0.6 percent in February, data released by the Ministry of Economics and Technology showed Wednesday.
Economists had forecast output to dip 0.1 percent, following the previous month's originally reported 0.5 percent gain.
The greenback climbed to over a one-week high of $1.5445 against the pound sterling yesterday, but has fallen to a 2-day low of $1.5590 on Wednesday.
Retail sales in the United Kingdom were weak in April. The British Retail Consortium reported Wednesday that retail sales values declined 2.2 percent on a like-for-like basis from April 2012. Overall sales were down 0.6 percent on year.
Residential property prices in the United Kingdom increased for the third straight month in April, supported mainly by the low levels of mortgage payments in relation to income.
The house price index rose 1.1 percent month-on-month in April, which was faster than the revised 0.4 percent gain recorded in March, a monthly survey by the Lloyds Banking Group's Halifax division showed Wednesday. It was the biggest monthly growth since November last year.
Economists had forecast prices to stay unchanged month-on-month, following March's originally reported 0.2 percent increase. The standardized price of a U.K. home rose to GBP 166,094 from GBP 164,289 in March, reaching the highest level in nearly three years.
The buck has weakened slightly against the Japanese Yen since reaching a high of Y99.443 on Monday. The U.S. currency has slipped to around Y98.800 on Wednesday.
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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.