Euro steady ahead of European PMI data

The euro held steady against the dollar Wednesday ahead of key eurozone economic data as investors remained buoyed by a positive German sentiment survey this week.

The euro bought $1.3315 around 2200 GMT, slipping slightly from $1.3321 at the same time Tuesday.

Kathy Lien at BK Asset Management said traders awaited PMI numbers for the month of January scheduled for release Thursday.

"They tend to provide the most up-to-date look at how the economy is performing. Based on the ZEW survey, investors are very optimistic about the outlook for Europe but the International Monetary Fund clearly doesn't share this view," Lien said.

The IMF cut its global growth forecasts slightly Wednesday, predicting for the first time that the eurozone, mired in a public debt crisis, would spend a second year in recession in 2013.

"That weighed on the euro," said Charles St-Arnaud, an analyst at Nomura. "But investors expected that and the euro then rebounded."

The analyst highlighted that some eurozone nations have been able to go back to the financial markets, as shown by strong demand for bond issues by Spain and Portugal.

The euro has been trading in a narrow range for several days around $1.3330 in a market mainly focused on profit taking, traders said.

Overall, the markets struggled to find direction Wednesday, said Anita Paluch, an analyst at Gekko Markets.

The yen continued to strengthen after the Bank of Japan's announcement Tuesday of stimulus to boost the lackluster economy.

The dollar ticked down to 88.56 yen from 88.68 yen late Tuesday, while the euro dipped to 118.00 yen from 118.14 yen.

After the US House of Representatives voted to temporarily suspend the nation's debt ceiling "the performance of the dollar was mixed," Lien said.

"The successful passage of a debt limit extension was a given considering that the bill was drafted by House Republicans -- to reject the bill would have been a complete embarrassment for the party."

The dollar rose against the Swiss currency, to 0.9292 francs from 0.9285 francs late Tuesday.

The pound rose to $1.5840 from $1.5836.