The euro was on the defensive on Wednesday following weaker-than-expected German sentiment data, while worries over a possible U.S. government shutdown underpinned the yen against the dollar.
Traders, wrong-footed by last week’s shock decision by the U.S. Federal Reserve to keep its bond-buying stimulus intact, also remain cautious and on data-watch mode as they consider for how long the U.S. central bank could hold off from tapering.
That uncertainty over the Fed’s outlook and comments on Monday from European Central Bank President Mario Draghi that the bank was ready to provide more long-term loans to keep money-market rates from rising have kept the dollar and euro pinned down.
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