The U.S. Dollar declined against the Euro and the Yen as investors were anticipating that the Federal Reserve will expand its bond-purchasing program when it meets later today.
The greenback remained weak against the aforementioned Forex currencies following the release of better than expected economic data out of China which showed that factory production increased 10.1% last month and Retail Sales rose to 14.9%.
Meanwhile, the Euro erased losses versus the U.S. monetary unit as stocks pared a drop subsequent to an announcement by McDonald’s Corp. indicating that the restaurant franchise posted a hike in sales of 2.4% globally. However, the Euro’s gains were somewhat limited as Italy’s Prime Minister, Mario Monti, stated that he plans to resign, a factor that caused the Yen to reach the highest level in close to two weeks against the shared currency. Technical analysis experts believe the news may continue to weigh on the Euro, especially as Mr. Monti tries to talk his coalition into approving the budget prior to his resignation.
Other news about Forex rates revealed that Canada’s Dollar rallied as the government approved the purchase of the energy company, Nexen Inc. by Cnooc Ltd. (883) for the amount of $15.1 billion.
Lastly, the Australian Dollar dropped from a two-month high after China reported that its imports and exports fell short of forecasts. According to the official figures, exports went up 2.9% from the previous year while imports stayed the same. This dampened the trade outlook for Australia.