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© Reuters.
By Peter Nurse
Investing.com – The US dollar lost positions at the start of trading on Wednesday in Europe, reversing gains posted overnight, as Western governments played down a deadly missile attack on a small Polish town, lest they escalate tensions with Russia.
By 08:55 AM ET (0855 GMT), the , which tracks the currency against a basket of six other major currencies, is down 0.3% to 106.013, after hitting 106.76. on Wednesday.
The dollar, considered a safe haven, had experienced a rise early this Wednesday after learning that a Russian-made missile had killed two people in a town in Poland, a NATO member near the border with Ukraine, which made fear an escalation of the war.
However, Moscow has denied responsibility for the attack, and US President Joe Biden has said early reports suggest the weapon was probably not fired by Russia, though the investigation is ongoing.
The dollar had sold off massively on Tuesday, after reports of a weaker-than-expected rise in producer prices, adding to last week’s cold consumer inflation data, which suggested that the aggressive streak of rate hikes by the Federal Reserve could be coming to an end.
Elsewhere, the pair was flat at the 1.1858 level, just below its three-month highs, after data showed UK inflation hit new multi-decade highs in October, driven by rising food and energy prices.
The consumer price index rose only one compared to September, and one compared to the previous year, exceeding forecasts of a monthly rise of 1.7% and an annual rate of 10.7%.
These figures point to further interest rate hikes by the UK, and will also disappoint the UK government, which will announce new tax and spending plans for the coming years on Thursday.
The pair is up 0.4% to 1.0389, near its three-month high, while the risk-sensitive 0.1% rises to 0.6763, holding higher despite growing geopolitical tensions.
The pair rises 0.2% to the 139.62 level, while the yuan is up 0.5% to 7.0770, and the yuan has been weighed down by data indicating that prices of Chinese housing plunged in October to a seven-year low.
This comes after industrial production and retail sales data came out earlier this week, suggesting that the world’s second-largest economy is under a lot of pressure.
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