The euro was faced with big losses early on Wednesday as ECB policymakers stated on Tuesday that the bank may act further in order to boost inflation and excite the economy. EUR/USD was back down below $1.12, trading near $1.11. The British pound also dropped below $1.55 on Tuesday, reaching a weekly low as UK Consumer Price Index data fell below expectations. Overall though, Britain’s economic outlook seems more optimistic versus some of its European peers.
Japan’s economy grew by 2.4%, the fastest pace in the past year and its quarter-on-quarter GDP grew by 0.6% in the first quarter of 2015 beating expectations which estimated a 0.4% increase. The Bank of Japan is seen holding rates constant later on this week at its two day meeting. The Japanese Nikkei index (Japan225) climbed close to a monthly high early on Wednesday, reaching 20,225.
Yahoo shares dropped more than 7.6% slightly before Tuesday’s close due to worries that a potential US Tax regulations change could impact Yahoo’s expected spinoff of its holding in the Alibaba Group. The trading volume during the last 20 minutes of the session was three times Yahoo’s ten-day average.
The greenback has been trading at a two week high versus a number of major currencies, further boosted by the positive Building Permits data on Tuesday. On the other hand, oil prices dropped by more than 3%, with crude oil sliding to $57.92 ahead of the Inventories data due at 14:30 GMT.