Investing.com - The dollar was trading close to eight week highs against a basket of other major currencies on Wednesday as expectations for monetary easing from the European Central Bank continued to weigh on the euro.
EUR/USD was down 0.11% to 1.3620, not far from the three-month trough of 1.3611 plumbed on Tuesday.
The euro has weakened broadly against the other major currencies, falling more than 2% against the dollar since the ECB indicated at its May 8 meeting that it is comfortable with easing monetary policy as soon as its next meeting in June, to tackle low levels of inflation in the region.
On Tuesday, ECB President Mario Draghi said the bank was aware of the risks of persistently low inflation and was prepared to take steps to get euro zone inflation back to its target, the latest indication that the bank could ease monetary policy as soon as next week.
The annual rate of euro zone inflation was 0.7% in April, well below the ECB''s target of close to but just below 2%.
Meanwhile, data on Wednesday showed that the number of people unemployed in Germany rose by the largest amount in five years in May. The seasonally adjusted jobless total rose by 24,000 this month to 2.905 million, compared to expectations for a fall of 15,000.
The German unemployment rate remained unchanged at 6.7%, well below the euro zone average of 11.8%.
USD/JPY dipped 0.06% to 101.92, not far from Tuesday’s two-week highs of 102.13, while USD/CHF eased up 0.11% to 0.8982, the strongest since mid-February.
Demand for the dollar continued to be underpinned after data on Tuesday showed that U.S. durable goods orders rose unexpectedly in April and another report showed that U.S. consumer confidence improved in line with forecasts this month.
The pound fell to two-week lows, with GBP/USD down 0.31% to 1.6757. Sterling hit session lows after the Confederation of British Industry reported Wednesday that U.K. retail sale volumes fell unexpectedly in May. The data tempered expectations for a rate hike by the Bank of England later this year.
AUD/USD was down 0.19% to 0.9241, while NZD/USD dropped 0.80% to 0.8495. The drop in the kiwi came after a report showed that the ANZ business confidence index for New Zealand fell to 53.5 this month, from a reading of 64.8 in April.
Elsewhere, USD/CAD was at 1.0850.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, edged up 0.06% to 80.47, just below the highs of 80.52 reached on Tuesday.
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