Major currencies narrowly fluttered on Wednesday, where the greenback is facing pressure ahead of the House of Representatives who plans a vote to suspend to U.S. borrowing limit, whereas the IMF cut back its global growth forecasts citing the European sovereign debt crisis.
The U.S. House of Representatives is set to vote on a legislation to suspend the nation’s borrowing limit at $16.4 trillion until May 19, where at that time, the ceiling would be increased to meet the Treasury’s borrowing needs.
Separately, the International Monetary Fund (IMF) revised its global growth forecasts lower, as will be affected the risks of the European debt crisis, where their prediction for global output was lower to 3.5%, from 3.6% in October’s forecasts.
In addition, the IMF stated that they now forecast the Eurozone to contract by 0.2% in 2013, compared to October, when they forecasted it to expand 0.2% in 2013.
As of 12:20 EST, the EUR/USD pair slipped to trade around 1.3305, after opening at 1.3322, while hitting a high of 1.3355, and a low of 1.3265.
As for the British pound, it sustained it’s momentum against the U.S. dollar after the release of cheerful labor market data from the U.K., as today’s report showed U.K’s jobless claims dropped 12.100 in December, its lowest since June 2011, while Unemployment dropped to 7.7%, its lowest since April 2011.
The GBP/USD trades around 1.5841, after opening at 1.5839, while it reached a high of 1.5892 and a low of 1.5802.
Moreover, the USD/JPY retreated to trade around 88.55 after opening at 88.71, noting that it hit a high of 88.79, and a low of 88.06, as the pair weakend after the Bank of Japan announced a new unlimited asset purchase program set to activate next year.
On another end, the Canadian Dollar slipped against the U.S. dollar after the Bank of Canada held its key interest rate unchanged at 1.0%, while also lowering its growth forecasts for 2013.
The USD/CAD trades around 0.9994, after opening at 0.9919, while reaching a high of 1.0005, and a low of 0.9904.