The U.S. dollar slipped modestly on Wednesday as markets weighed upcoming corporate news against geopolitical and monetary policy developments.
At 03:50 ET (08:50 GMT), the Dollar Index, which measures the greenback against a basket of six currencies, was down 0.1% at 97.707. The index has risen roughly 1% over the past month.
Nvidia earnings in focus
Investor attention turned to the quarterly report from chipmaker Nvidia, due after Wall Street closes, amid unease over lofty valuations in the technology sector and heavy investment into artificial intelligence. Market watchers expect the results to be an important gauge of sentiment for technology shares and broader risk appetite.
"Nvidia will probably need to beat consensus and offer strong guidance to provide meaningful reassurance,"
ING observed in a note that a disappointing report could pose a larger downside risk to global risk sentiment than the upside from a beat. ING added:
"If the USD were to fall alongside high‑beta FX, it would be a concerning signal that markets are developing broader, U.S.‑specific worries linked to AI revaluations. We sense that this is less likely, and that the dollar will instead continue to respect its somewhat reduced - but still negative - correlation with US equities."
Trade policy and tariffs
The dollar has also been trading in a relatively narrow range since a new 10% global tariff announced by U.S. President Donald Trump took effect on Tuesday, with markets bracing for the possibility of the levy rising to 15%. The president indicated he will press ahead with his tariff agenda during his State of the Union address overnight. However, any further imposition of tariffs is likely to be constrained because additional duties would require Congressional approval after a recent Supreme Court ruling limited unilateral action.
Euro and German growth
In Europe, EUR/USD rose 0.2% to 1.1792. The single currency drew support from data showing Germany - the eurozone's largest economy - expanded by 0.3% in the fourth quarter of 2025 compared with the prior quarter, marking an improvement from three months of flat growth.
Despite the uptick, gains in the euro remained modest, with market participants expecting Friday's inflation figures to be the week's main data driver.
"That said, concerns about concentration risks in the US remain quite vivid and are likely to continue encouraging buying on EUR/USD dips. We are still inclined to think the 1.1750-60 support can hold for now,"
ING noted that lingering worries about concentration risk in U.S. markets may underpin demand for the euro when it dips.
Pound and Bank of England signals
GBP/USD climbed 0.2% to 1.3521, recovering slightly from a one-month low. The move followed remarks from Bank of England Governor Andrew Bailey, who said a March interest rate cut remains a possibility but cautioned that services price inflation - a closely watched indicator by the central bank - has not fallen as much as hoped.
Bailey was part of a 5-4 majority on the Monetary Policy Committee that chose to hold interest rates earlier in the month.
Asian markets and the yen
In Asia, USD/JPY rose 0.1% to 156.00, keeping the pair close to a two-week high. Media reports indicated that Prime Minister Sanae Takaichi raised concerns about further rate rises during talks with Bank of Japan Governor Kazuo Ueda. Those reports fed speculation that political resistance could limit the BOJ's path for additional tightening.
China, Australia and other currency moves
USD/CNY traded 0.2% lower at 6.8672.
AUD/USD jumped 0.7% to 0.7106 after data showed headline inflation rose 3.8% year-on-year in January, unchanged from December but above market expectations. The Reserve Bank of Australia's favored trimmed-mean measure of core inflation climbed to 3.4%, its highest level in over a year. That outcome led markets to increase the probability they assign to a potential May rate hike from the RBA.
What to watch next
Investors will be monitoring Nvidia's results for cues on technology sector valuations and momentum in AI spending, central bank commentary for guidance on future policy moves, and upcoming inflation readings that could shape rate expectations in the near term. Markets remain sensitive to developments that could shift risk sentiment or influence the dollar's relationship with equities and higher-beta currencies.
Given the convergence of corporate earnings, trade-policy shifts and central bank commentary across regions, currency markets are likely to remain responsive to data and announcements in the coming sessions.