06:25 AM EDT, 06/12/2024 (MT Newswires) -- US dollar exchange rates fell broadly in early European trade on Wednesday as high beta currencies and other risky assets outperformed ahead of an eagerly awaited inflation report in the US and the June Federal Reserve policy decision.

The US dollar weakened against all counterparts in the G10 basket except the Japanese yen and New Zealand dollar with its largest losses coming in relation to the high beta Norwegian krone and Swedish krona.

Dollar losses were equally broad based in relation to the wider G20 basket where the Mexican peso and South African rand underperformed when giving ground to the greenback, while the Korean won outperformed.

High beta currencies prospered amid broad gains for risky assets like stocks in Europe and Asia, and a bid for government bonds that drove yields lower in most parts including those implied by US government bond futures.

There was little data released in Europe and Asia where attention is fixed on the 8:30 am ET release of US inflation figures for May and the 2 pm ET release of the June Federal Reserve monetary policy decision.

A quick summary of foreign exchange activity heading into the European lunch hour and US open:

In Europe, EUR/USD was quoted 0.08% higher around 1.0748 after climbing off overnight lows around 1.0734 and extending its recovery from Tuesday's intraday lows around 1.0713. EUR/USD was on course for its first intraday gain of the week but stalled briefly in its recovery when German inflation was confirmed to have risen 2.4% YoY in May. There is no meaningful data scheduled this week in Europe where attention is on US calendar items like May CPI and the Fed decision.

Elsewhere in Europe, GBP/USD was quoted 0.10% higher around 1.2753 after rising steadily in Europe and Asia from the intraday lows around 1.2705 seen on Tuesday and a nadir of 1.2687 from Monday. Sterling wobbled briefly but was also quick to recover after UK GDP growth stalled at 0% in April. The UK economy grew 0.6% YoY in April and the Bank of England projects a 0.2% QoQ increase for Q2. The next calendar highlight in the UK is the release of May retail sales figures on Friday.

In Asia, USD/JPY was quoted 0.13% higher around 157.31 after rising persistently in Europe and Asia overnight with gains lifting the pair from the intraday lows around 156.79 seen on Tuesday. The yen steadied momentarily before losses resumed after the Bank of Japan said producer prices rose 0.7% MoM in May and 2.4% YoY, topping the consensus for increases of 0.4% MoM and 2% YoY respectively. The next calendar highlight in Japan is Friday's BoJ policy decision.

Back in North America, USD/CAD was quoted 0.04% lower around 1.3748, making the Canadian dollar one of the poorer performing G10 currencies, after falling from highs around 1.3760 overnight and the intraday peak of 1.3791 seen on Tuesday.

Attention in Canada now shifts to a 3:15 pm speech by Bank of Canada Governor Tiff Macklem, though the Loonie will also be sensitive to US CPI data out beforehand and the subsequent Fed policy decision.