Dollar holds steady as solid earnings support US stocks

Key Points
  • Euro zone, UK CPI data weaker than expected
  • Canadian dollar weakens as Bank of Canada leaves rates unchanged
Dan Kitwood | Getty Images

The U.S. dollar held steady versus a basket of currencies on Wednesday, as solid company results and fading concerns about a trade war renewed investor purchases of U.S. stocks, keeping a lid on safe-haven demand for the greenback.

The dollar also has found support from relatively stronger economic figures than those seen in Europe and other developed markets, as well as reduced fears that Western air strikes on Syria would intensify. Nevertheless, the greenback remains on a bearish path on expectations that the U.S. trade and federal deficits would balloon in the coming quarters, many analysts said.

"Once we get away from this period of risk-off, we are still on the regime that the dollar is weakeninng," said Ilya Gofshteyn, global macro strategist at Standard Chartered in New York.

The dollar index, which tracks the greenback against a basket of six currencies, edged up 0.10 percent, to 89.60. It has moved in a narrow range between 89.229 and 90.597 since March 28.

On Wall Street, the Dow Jones Industrial Average fell 0.01 percent, to 24,784.61, the gained 8.96 points, or 0.33 percent, to 2,715.35 and the Nasdaq Composite added 33.49 points, or 0.46 percent, to 7,314.34.

The euro was last up 0.09 percent, at $1.2381, while the greenback was 0.18 percent higher, at 107.18 .

Among other G10 currencies, the pound was down 0.57 percent at $1.4205 after it was nudged away from a post-Brexit referendum 22-month high of $1.4377 on Tuesday by weaker-than-expected British wage data.

Markets were still pricing in a more than even chance the Bank of England will hike interest rates in May, expectations of which have helped sterling advance aggressively this month.

The fell 0.68 percent to C$1.263 per dollar after the Bank of Canada, as expected, left key rates unchanged, but the tone in its policy statement was not as hawkish as some traders had expected.

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