Dollar lower ahead before Fed minutes, Bernanke

The dollar was broadly lower against the other major currencies on Wednesday, ahead of minutes from the Federal Reserve’s latest meeting and what would be a closely watched speech by Fed Chairman Ben Bernanke.

During European afternoon trade, the dollar pulled away from three-month highs against the euro, with EUR/USD up 0.28% to 1.2813.

The dollar looked likely to resume its strengthening trend if the minutes of the Fed’s June meeting and Ben Bernanke reiterated that the U.S. central bank is close to tapering its USD85 billion-a-month asset purchase program. 

The euro’s gains looked likely to remain limited after a senior European Central Bank policymaker said Tuesday that the bank’s forward guidance on interest rates extended beyond 12 months.

The dollar eased back from three-year highs against the pound, withGBP/USD rising 0.23% to 1.4898.

The pound dropped to its lowest since June 2010 against the dollar on Tuesday after unexpectedly weak U.K. manufacturing data increased the likelihood of further easing by the Bank of England.

The dollar was sharply lower against the safe haven yen, with USD/JPYdropping 0.91% to 100.20.

Demand for the safe haven yen was boosted after official data on Wednesday showed that Chinese exports fell unexpectedly last month, fuelling concerns over a slowdown in global demand. Imports were also lower, indicating that domestic demand was weakening.

The dollar was also weaker against the Swiss franc, with USD/CHF down 0.26% to 0.9704. 

The greenback was mixed against its Australian, New Zealand and Canadian counterparts, with AUD/USD climbing 0.19% to 0.9192,NZD/USD dipping 0.03% to 0.7852 and USD/CAD slipping 0.09% to 1.0517.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.34% to 84.56.