The dollar leveled off on Wednesday versus the euro, easing slightly from last night’s monthly high amid hopes that the global economy can find its footing in the fourth quarter.
Despite some ominous signs from Europe, analysts say that encouraging economic news from the U.S. could give a lift to riskier assets.
U.S. crude oil prices soared to their highest closing mark since June, bursting through the $100 a barrel barrier.
Costs for consumer goods in the U.S. decreased slightly in October, according to a report released Wednesday by the Labor Department.
The consumer price index edged down by 0.1 percent for the month, driven largely by a drop in energy prices, which fell by 2.0 percent. Most economists had expected consumer prices to come in essentially unchanged.
Across the Atlantic, European Commission President Jose Manuel Barroso warned the euro zone faces a “systemic crisis.”
“We are indeed now facing a truly systemic crisis that requires an even stronger commitment from all and that may require additional and very important measures,” Barroso told the European Parliament.
Italian borrowing costs hovered near 7 percent, an unsustainable level that has raised fears about the viability of the euro monetary union.
The dollar rose to a monthly peak of $1.3411 before leveling off to $1.3530.
Against the sterling, the buck was steady near $1.5775, after touching a monthly high of $1.5737.
The Bank of England now sees domestic growth of only around one percent in 2012.
“Despite the [central bank’s] easier monetary stance, growth over the next few quarters is likely to be markedly weaker than in the August projection,” BOE Governor Mervyn King said this morning.
U.K. unemployment rate surged to a 15-year high after public sector cut jobs and private sector was forced to scale back job creation as business confidence weakened on fears of a sharp downturn in the economy.
There was little movement near Y77 versus the yen.
The Bank of Japan on Wednesday kept its monetary policy unchanged, but downgraded the assessment of the economy, citing adverse effects from European debt crisis and the appreciation of yen.