The dollar was range-bound vesus the euro on Wednesday New York, holding steady between 1.454 and 1.46 after losing a cent in the previous session. The buck has levelled off since hitting a multi-week high of 1.4438 last Thursday.
Euro Zone's seasonally adjusted industrial production dropped 0.2% month-on-month in December, slower than the revised 0.4% in November. Economists were looking for an increase of 0.6% for December.
The dollar extended its week-long downtrend versus the sterling, slipping to 1.9606 in early dealing before stabilizing. Traders weighed a report from the Bank of England that states that the UK's near-term outlook for inflation is rising sharply alongside a marked slowing in growth.
In his opening remarks, the BoE governor Mervyn King noted that tighter credit conditions for households and businesses would bear down on demand both in the UK and abroad with the central bank having the view that expectations of a 75 basis point rate cut during 2008 are overblown.
The dollar surged to the upside versus the broadly weaker yen on Wednesday, jumping to 108.36 from an overnight level near 107. With the advance, the dollar broke out of a 3-week trading range and hit a one-month peak. The yen was down versus other majors as gains in equities markets fueled risk appetite. Investors considered a report showing that Japan's GDP growth will slow to 1.74% in the 2008 fiscal year.
