Dollar little changed vs euro, yen

[NEW YORK] The dollar was little changed against the euro and the yen on Wednesday, while the pound rallied on solid economic data on the eve of the Bank of England's policy decision.

The euro slipped slightly to US$1.1237 and the dollar edged up to 120.00 yen.

"Neither has moved much of recent, perhaps due to the upswing in investor sentiment as evidenced by the turn higher in global equity markets," said Christopher Vecchio at DailyFX.

"We find ourselves back in what we saw at the beginning of the week, a little more risk appetite that boosts commodities and equities" at the expense of the euro, said Vassili Serebriakov of BNP Paribas.

The euro suffered from a larger-than-expected drop in industrial production in Germany, Europe's powerhouse, analysts said.

Meanwhile, the pound surged as "industrial production rose three times more than expected in the month of August, which was a breath of fresh air after back-to-back data disappointments," said Kathy Lien of BK Asset Management.

The Bank of England, expected to leave monetary policy unchanged Thursday, also will release the minutes of the meeting.

"The number of dissenters and the overall tone will have a significant impact on the currency," she said.

Traders also awaited the minutes of the September meeting of the Federal Open Market Committee, the Federal Reserve's policy arm, due on Thursday.

The FOMC passed last month on raising interest rates from near zero, leaving forex traders to hope they will gain insight into the central bank's thinking on the timing of the rate hike.

"Given that the meeting was held before the abysmal nonfarm payrolls report, investors will most likely look beyond the report," Ms Lien said.

AFP