Previous session overview : The euro rose against the dollar and yen in Asia Wednesday as investors bought back the unit once it became apparent that China's interest rate hike on Tuesday had only a limited impact on regional share markets.
When shares fall, the euro often follows suit, so investors tend to decease their holdings of the currency when share declines are expected. But investors bought back the euro after the limited declines in regional share markets became apparent, pushing the currency to USD1.3646 and JPY112.50 at 0450GMT, from USD1.3625 and JPY112.25 in New York Tuesday.
The greenback, meanwhile, stood at JPY82.43 from JPY82.37 in New York, while the ICE Dollar Index, which tracks the U.S. dollar against a trade-weighted basket of currencies, was at 77.935 from 77.991.
Sterling, now lower against the dollar and euro, is likely to consolidate in ranges Wednesday pending the Bank of England meeting result Thursday.
The Australian dollar was slightly lower late Wednesday but going nowhere fast as traders braced for the release of local January employment data on Thursday, a report which could have a significant effect on the outlook for interest rates. The Aussie was unable to make any headway despite a generally weaker U.S. dollar in Asian trading.
Market expectation : Investors will pay attention to data from Europe, such as German trade figures for December, and the euro will likely remain stable unless the data turn out to be much worse than the market consensus. The German trade data due at 0700 GMT is expected to show a EUR12.7 billion increase in the country's trade balance, according to economists.
Looking ahead, investors will pay attention to U.S. Federal Reserve Chairman Ben Bernanke's testimony to the House Budget Committee on the economy at 1500 GMT. Read more