The dollar is little changed on Wednesday, as the 2-day FOMC meeting nears its conclusion later this afternoon. The U.S. currency is basically flat against the Euro, but is slightly lower against both the pound sterling and the Japanese Yen. Investors are eagerly anticipating Federal Reserve Chairman Ben Bernanke's press conference this afternoon. They are hoping for a clear indication of when the Fed is planning on tapering its economic stimulus measures.
The International Monetary Fund on Wednesday urged Spain and Europe to take urgent steps to generate growth and jobs as the outlook remained tough.
Spain's unemployment level is "unacceptably high" and the outlook remained difficult. "This calls for urgent action to generate growth and jobs, both by Spain and Europe," the lender said in a regular review report.
However, the IMF applauded Spanish authorities for the "strong progress" made on critical and difficult reforms. It noted that key imbalances are correcting rapidly and sovereign spreads have fallen sharply as a result of the reforms.
Greek Finance Minister Yiannis Stournaras said Tuesday that notable progress has been made in negotiations with the country's international creditors on the next bailout installment.
The Greek economy is undergoing significant fiscal adjustment program, as recommended by the troika comprising the European Union, the European Central Bank and the International Monetary Fund, to put the country's debt on a sustainable path.
The twice-bailed out-euro member is now awaiting the next slice of loan installment from the troika. The creditors' representatives are in Athens to carry out a regular inspection on the progress of the program implementation.
The dollar has remained range-bound around the $1.3400 level against the Euro on Wednesday, just slightly higher than the 4-month low of $1.3415 set yesterday.
Eurozone's construction output increased in April, reversing March's decline, the latest figures from Eurostat revealed Wednesday. Production in construction rose 2 percent month-on-month in April following a 1.8 percent fall in March and a 1.3 percent increase in February.
A leading indicator of French economic activity declined in April, a report from the Conference Board showed Wednesday. The leading economic index or LEI fell 0.5 percent from a month earlier to 114.2 following an increase of 0.4 percent in March. During the six-month through April, the index increased 1.1 percent.
Spain's merchandise trade shortfall decreased significantly from last year in April as exports increased at a notably faster rate than imports, data released by the Commerce Ministry showed Wednesday. The net trade for April resulted in a deficit of EUR1.64 billion, which was 51.1 percent lower than in the same month last year.
Outgoing Bank of England Governor Mervyn King was outvoted in his final policy meeting, as most policymakers overturned his call for additional stimulus citing sustained economic recovery, the minutes of the session held on June 5 and 6 showed Wednesday.
As seen in the past few months, King, Paul Fisher and David Miles sought an increase in quantitative easing by GBP 25 billion, while other six members of the committee voted to retain it at GBP 375 billion.
King, whose call for QE has been defeated since February, is set to step down from the Governor post at the end of this month. He has held the post of the BoE Governor for the past 10 years and cast his vote 194 times since the central bank became independent in 1997. His successor Mark Carney is not expected to take any action at his first MPC meeting in July.
The greenback has pulled back from yesterday's high of $1.5564 against the pound sterling on Wednesday, to around $1.5650.
Bank of Japan Governor Haruhiko Kuroda said Wednesday that financial markets may gradually regain stability, reflecting the steady improvement in Japanese economic activity.
"Given that Japan's economy is on a steady path toward recovery, however, they are expected to gradually regain stability, reflecting positive momentum in economic activity," he said during a semiannual hearing on monetary policy in Parliament.
He said the rise in some market indicators of inflation expectations has come to a pause. However, other indicators including the surveys conducted on households and economists suggested a rise on the whole, Kuroda told lawmakers.
The buck declined in early trade against the Japanese Yen on Wednesday and has since leveled off around the Y95.000 level.
Japan posted a merchandise trade deficit of 993.916 billion yen in May, the Ministry of Finance said on Wednesday - slipping into the red for the 10th consecutive month. The headline figure beat forecasts for a shortfall of 1.22 trillion yen following the downwardly revised deficit of 881.9 billion yen in April.
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