The dollar rose to a one-week high
against the yen as an advance in U.S. stocks encouraged investors
to buy higher-yielding assets funded in Japan.
The
15-nation euro is overvalued by as much as 20 percent against the dollar,
French Finance Minister Christine Lagarde said late yesterday. The Australian
dollar fell against the Canadian dollar, the U.S. dollar and the pound as wage
growth unexpectedly slowed last quarter.
The dollar erased earlier gains
versus the euro, in what analysts said was a knee-jerk reaction to
the CPI report.
The yen fell broadly
on Wednesday as a benign U.S. consumer inflation report for April raised
investors' appetite for risk and was seen giving the Federal Reserve
flexibility to deal with an economic downturn.
The
unexpectedly slower increase in the consumer price index (CPI) briefly caused
traders to sell the dollar, but analysts said it did not alter market views the
Fed's interest-rate-cutting campaign was almost over.
Sterling slumped to a near three-month low
against the dollar after the Bank of England, in its quarterly
inflation report, said British prices would shoot up this year, which many
believe may delay interest rate cuts.
EUR/USD having posted session
low at $1.5395 rose to $1.5480/90.
GBP/USD tested $1.9360
before rebounded back above $1.9410/20. Later rate reached $1.9470.
USD/JPY reached Y105.45
before stabilized around Y104.80.
Thursday is full by economic
releases. EU session includes GDP report from EU.
Later (at 12:30 GMT), US Treasuries will
release its TICS figures. Industrial production and Philly Fed’s index also due
to come.