The greenback fell on Wednesday versus the euro in reaction to mixed US economic data and indication of further quantitative easing by US Federal Reserve. The US dollar fell after the report of the Wall Street Journal in which it was disclosed that US Fed will opt for new bond purchasing program in which long term Treasury or mortgage bonds will be purchased but the money will be tied up by borrowing for short term periods at low rates.
It is anticipated by the US central bank that new bond purchasing program will eliminate the negative impact of quantitative easing on currency which was highly criticized in earlier two QE programs. The US dollar did get some strength on latest jobs data by ADP according to which private sector jobs increased by 216,000 in month of February which was in line with target.
The dollar index DXY which measures the US dollar’s performance versus its six major rival currencies declined to 79.692 on Wednesday as compared to 79.843 on Tuesday’s North American trading session.
The single currency gained to 1.3154 against the greenback on Wednesday as compared to 1.3111 on Tuesday’s late trading hours. The euro also gained against the Japanese yen to 106.80 on Wednesday as compared to 105.97 on late Tuesday.
Among other currencies, the British Pound gained 0.2 percent versus the US dollar to 1.5743 on Wednesday. Against the Japanese yen, the US dollar fell to 81.21 on Wednesday as compared to 80.81 on late Tuesday.