Published: Wed, 15 Apr 2009 12:30:02 +0200

US Dollar Mixed After Quiet European and Asia-Pacific Sessions

(CEP News) - The greenback is mixed against majors on Wednesday after a relatively quiet session in Europe and Asia, and on the back of some mixed equity market sentiment.

Foreign direct investment into China increased to US$8.4 billion in March versus $5.83 billion in February, but remained lower by 9.5% compared to twelve months ago, according to the Ministry of Commerce on Wednesday.

Following the release, Commerce Ministry spokesperson Yao Jian said the data implies that the country's foreign exchange reserves should continue to rise.

Although the European Central Bank should use the leeway to reduce rates further than the current 1.25% level, Bundesbank President Axel Weber said he was "critical" of lowering rates beyond the 1.00% threshold.

Speaking at an event in Hamburg on Wednesday, Weber said that in an environment of very low interest rates, banks would have less incentive to lend to one another and consequently credit markets would become "completely paralyzed."

Meanwhile, markets are preparing for a barrage of macroeconomic data releases on Wednesday including CPI, industrial production, the Empire Fed's manufacturing index, the NAHB housing market index, the Fed's Beige Book and TIC data from the U.S. Treasury.

On the equity market front, futures contracts on the Dow Jones Industrial Average are up 9 points to 7,893, the S&P 500 up 1 points to 841 and the Nasdaq down 7 points to 1,317.

While there are no major earnings announcements expected from the United States on Wednesday, markets participants are gearing up for JPMorgan Chase on Thursday followed by Citigroup and General Electric on Friday.

All data taken at 6:27 a.m. EDT

Euro/USD up 0.10 cents to 1.3269

USD/CAD down 0.22 cents to 1.2130

USD/Yen down 0.04 points to 98.93

GBP/USD up 0.94 cents to 1.4988

AUD/USD down 0.33 cents to 0.7206

The U.S. Dollar Index is up 0.17 points to 84.81

By Erik Kevin Franco, efranco@economicnews.ca; edited by Nick Say, nsay@economicnews.ca