By Carla Mozee, MarketWatch
Pending homes sales on tap
The U.S. dollar slipped Wednesday, with the euro headed toward its highest against the greenback in a year as investors gauge when the European Central Bank may start winding down monetary stimulus.
The ICE Dollar Index , a measure of the currency against a basket of six major rivals, fell 0.2% to 96.30.
That move came in part as the euro , which has the largest weighing in the index, marched toward $1.1400. That's territory unknown to the shared currency since June 2016, according to FactSet data.
The euro was buying $1.1370 after hitting an intraday high of $1.1389. It fetched $1.1340 late Tuesday in New York.
Investors pushed the currency above $1.12 on Tuesday after ECB President Mario Draghi said the eurozone economy has grown thanks largely to the central bank's stimulus policies, and those will slowly be withdrawn as the economy improves. The ECB's program includes bond purchases of EUR60 billion ($67 billion) a month and ultra-low to negative interest rates.
"Sounding confident, ECB President Draghi seems prepared to reduce the asset purchases, and this overshadowed his explicit recognition that substantial accommodation is still necessary," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman in a note.
"This is very much in line with what many, including ourselves, anticipate. At the September ECB meeting, [the market could see] an extension of the asset purchases into the first part of next year, coupled with a reduction in the amounts being purchased."
Draghi, along with Bank of England Gov. Mark Carney and Bank of Japan Gov. Haruhiko Kuroda, will appear Wednesday in Sintra, Portugal, at the ECB Forum on Central Banking.
Against the Japanese yen, the greenback traded at Yen112.19, down from Yen112.35 late Tuesday.
Data: Also on deck Wednesday, the advance look at U.S. trade in goods in May is due at 8:30 a.m. Eastern. The trade gap in goods--services are excluded--is expected to narrow to $65.8 billion from $67.6 billion in April, according to a MarketWatch survey of economists.
At 10 a.m., the National Association of Realtors is expected to say pending home sales improved in May, by rising 0.5%. That would break two months of declines.
Elsewhere in the currency market, the pound rose to $1.2828 from $1.2814.
The "pound is processing the latest Bank of England interest rate comments, this time from Deputy Governor Jon Cunliffe. Cunliffe maintained the same line as [BOE Gov.] Mark Carney, stating that now is not the time for a hike," in interest rates, wrote Spreadex financial analyst Connor Campbell.
"Though this may have pushed sterling to a fresh 7 1/2-month low against the euro, cable is still sitting pretty above $1.28 after Donald Trump's domestic agenda was dealt another blow with the latest delay to the Senate healthcare vote on Tuesday night ," he said.
Cable is the nickname for the pound-dollar pair. The pound against the euro was trading at EUR1.1283, down from EUR1.1300 late Tuesday.