The euro slipped from a three-week high ahead of a Thursday meeting of the European Central Bank.
The euro and dollar drifted sideways early on Wednesday as a wait-and-see mood prevailed ahead of Thursday's European Central Bank policy meeting, which may set the tone in a post-Trump rally currency market. [USD/]
The euro was boosted last Friday by news that the ECB, while possibly extending its bond purchases beyond next March, may consider sending a formal signal that the asset purchase program will eventually end.
The euro fell 0.4 percent to $1.072 after rising sharply in the previous session as currency investors focused on the possibility the ECB may take a hawkish turn, even as it is widely expected to extend bond purchases.
The U.S. dollar rose 0.4 percent after dipping to a near three-week low against a basket of major currencies the previous day.
The U.S. trade deficit recorded its biggest increase in more than 1-1/2 years in October as exports of soybeans and other products fell, suggesting trade would be a drag on growth in the fourth quarter.
The Commerce Department said on Tuesday the trade gap rose 17.8 percent, the largest increase since March 2015, to $42.6 billion. Higher imports due to rising domestic demand also contributed to the widening of the deficit.
New orders for U.S. factory goods recorded their biggest increase in nearly 1-1/2 years in October, further evidence that the manufacturing sector is gradually recovering after a prolonged downturn.
The Commerce Department said on Tuesday new orders for manufactured goods rose 2.7 percent after an upwardly revised 0.6 percent gain in September. That was the largest increase since June 2015 and marked four straight months of gains.
The top Brexit negotiator for the European Union has slapped an 18-month time limit on deal talks with the United Kingdom.
Speaking in Brussels, Michel Barnier said with all process of ratification needed to be complete by March 2019, terms of the deal would need to be resolved by October 2018.
Italy could have an election as early as February, a minister in Prime Minister Matteo Renzi's outgoing government said on Tuesday, speaking after talking to Renzi.
The comments will add to growing support for a quick vote as the only way to avoid protracted political limbo in Italy following Sunday's "No" vote on Renzi's constitutional reforms.
Renzi announced he would step down after his heavy defeat. President Sergio Mattarella told him to stay on until parliament had approved the 2017 budget, expected later this week. Then, the president said, Renzi could tender his resignation.
Japanese manufacturers' confidence rose for a fourth straight month to a 16-month high in December and the service sector's mood also rose, a Reuters poll showed, with a weaker yen brightening prospects for exporters.
Oil prices on Tuesday ended lower for the first time since OPEC agreed on Nov. 30 to cut output, as data showing record high production in the producer group fed skepticism that it would be able to reduce supplies.
Brent futures slid $1.01 to settle at $53.93 a barrel, while U.S. West Texas Intermediate (WTI) crude futures fell 86 cents to $50.93 per barrel. Crude had surged more than 15 percent in the four sessions since the Nov. 30 OPEC meeting.
OPEC's output set another record high in November, rising to 34.19 million barrels per day (bpd) from 33.82 million bpd in October, according to a Reuters survey.
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