Dollar Steady With Spain In Focus

The U.S. dollar steadied in Asian trading hours on Wednesday, retaining the previous session’s strength ahead of some key events this week in Spain.

The ICE dollar index , which measures the greenback against a basket of six major currencies, traded at 79.672, from 79.673 late the previous day.

The greenback picked up on Tuesday after Charles Plosser, president of the Philadelphia Federal Reserve, said the Fed’s third round of bond purchases, which is aimed at stimulating economic activity, may not be effective.

Plosser’s comments “didn’t help sentiment as he noted the risks emanating from the third round of Fed’s QE and the potential lack of positive impact on the economy and jobs market,” said Mitul Kotecha, head of global foreign exchange strategy at Credit Agricole.

“It already appears as though the impact of recent central bank announcements is fading fast to be replaced by renewed global growth fears and yet more concerns about the lack of traction in delivering solutions to the fiscal crisis in Europe,” Kotecha added.

BNP Paribas strategists said that Spain — yet to request a bailout — is front and center for currency investors this week.

“Investors are likely to stay on the sidelines in anticipation of the release of the 2013 budget, reforms and the bottom-up banking sector review due out on Thursday and Friday,” said the strategists.

The euro traded at $1.2899, unchanged from late North American trading Tuesday.

The British pound  reached $1.6185, from $1.6188 on Tuesday.

Against the Japanese yen , the dollar edged down to ¥77.74, from ¥77.79 in late trading on Tuesday.

The Australian currency  slipped to $1.0365, from $1.0451 late the previous session.

“The focus remains on further stimulus out of China since commodity currencies, in particular, have fallen vulnerable to any disappointing news or data out of China,” said the BNP Paribas strategists.

Marketwatch