Euro hits seven-week low vs dollar
The euro hit a seven-week low versus the dollar on Wednesday and investors looked to minutes from the Federal Reserve's last policy meeting as expectations of interest rate cuts in the US continue to recede.
The yen pared earlier gains against the dollar, but ticked higher against other major currencies after a 6.5 per cent fall in Chinese stocks crimped risk appetite and put some pressure on carry trades, where investors borrow low-yielding currencies like the yen to buy higher-yielding assets.
The dip in Chinese stocks initially pushed the yen up across the board as investors scaled back short positions. However, this move was reversed against the dollar as investors turned their focus to the Federal Open Market Committee's minutes.
Weaker-than-expected private sector US job growth in May, as measured by the latest ADP Employment report, had little impact on currencies, suggesting investors aren't reading too much into that ahead of the non-farm payrolls report on Friday.
"We have to put forward risk that in the data in the next few days we will see a much larger move (in euro/dollar)," said Adrian Hughes, currency strategist at Societe Generale.