During U.S. morning trade, the dollar was fractionally higher against the euro, with EUR/USD dipping 0.02% to hit 1.3230.
Investors remained jittery amid sustained concerns over whether a second EUR130 billion bailout for Greece will be enough to resolve the country’s fiscal woes as the economic situation continues to deteriorate.
Earlier Wednesday, ratings agency Fitch cut Greece’s credit rating to C from CCC and reiterated that a bond-swap agreement with private creditors would be a restricted default.
Fitch said it would review its stance on Greece again once the debt swap had been completed.
Meanwhile, preliminary data showed that manufacturing activity in the euro zone improved less-than-expected in February, remaining in contraction territory for the seventh consecutive month, while service sector activity contracted unexpectedly.
Data from Germany and France showed modest growth in business activity, albeit at a slower pace than in January, but activity in peripheral euro zone nation’s showed a steep decline this month.
A separate report showed that new industrial orders across the euro zone increased by 1.8% in December, erasing the previous month’s 1.1% drop.
The greenback was higher against the pound, with GBP/USD shedding 0.68% to hit 1.5670.
Sterling weakened broadly after the minutes of the Bank of England’s February meeting showed that two policymakers supported a GBP75 billion increase to the bank’s asset purchase program this month, while the remainder of the monetary policy committee voted in favor of a GBP50 billion increase to GBP325 billion.
The greenback was higher against the yen but slipped lower against the Swiss franc, with USD/JPY climbing 0.66% to hit 80.27 and USD/CHF inching down 0.05% to hit 0.9120.
The yen has remained under pressure since last week’s decision by the Bank of Japan to implement fresh monetary easing measures in an attempt to boost growth and protect the economy from the effects of the strong yen.
Elsewhere, the greenback was higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD rising 0.38% to hit 1.0006, AUD/USD falling 0.37% to hit 1.0621 and NZD/USD falling 0.71% to hit 0.8276.
Sentiment on the commodity linked currencies weakened earlier, after preliminary data showed that China’s manufacturing sector contracting for a fourth straight month in February, adding to concerns over a slowdown in the world’s second largest economy.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.29% to hit 79.48.
In the U.S., a report by the National Association of Realtors showed that existing home sales rose by 4.3% to a seasonally adjusted 4.57 million units in January, disappointing expectations for a gain of 6.2% to 4.67 million units.
