The dollar gained versus the euro on Wednesday as the single currency suffered broadly under expectations that the ECB's policy review would result in a dovish Fed-like framework nL8N2GR2A3.

Soft national inflation figures nurtured deflation worries, with a 10bp euro zone rate cut priced in by next November, though an expansion of the ECB's pandemic emergency purchase programme is seen the first easing lever to be pulled if needed, which could be the case if COVID-19 outbreaks expand further nL8N2GQ1LG.

The dollar gave a mixed response to better-than-forecast ADP nL1N2GQ1FN, early release of strong Chicago ISM nL1N2GR14I and surging pending homes sales, due to its dual status as funding and safe-haven currency since the pandemic.

U.S.

House of Representative Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin met to discuss pandemic relief, initially lifting Treasury yields, stocks and risk-sensitive currencies.

That fizzled after Senate Majority Leader Mitch McConnell said Republicans and Democrats remained "very very far apart" on spending.

EUR/USD rebounded into the London close and quarter end, but remained moderately lower, limited by the 55-day moving average that looms above at 1.1767 on EBS nL1N2GR0Y8.

Investors will be better able to discern dollar direction once October trading starts and after U.S. jobs and euro zone CPI data on Friday.

Risk-sensitive sterling glommed onto the rally in U.S. stocks, despite Brexit angst and unease about record COVID-19 cases and new pandemic restrictions nL8N2GR496.

GBP/USD's recovery faces resistance by 1.3000, after having made an oversold bottom last week by the 100- and 200-day moving averages.

USD/JPY's recovery from September's 104 lows ran into resistance from the downtrend from June and 61.8% Fibo of its 106.945-104 drop at 105.82, further reinforced by the falling cloud base and 55-DMA resistance nearing Wednesday's 105.80 EBS high.

Good U.S. economic data, rising stocks and Treasury yields actually hurt USD/JPY due to the dollar's slight dominance as a haven and funding currency.

USD/JPY struggled to maintain a string of higher daily lows since the 104 trough.

Below Tuesday's 105.435 low would bring into play the tenkan and 50% Fibo of the rebound from 104 at 104.90 nL1N2GR12X.

Weekly charts still show room on the upside, however.

AUD/USD surged toward the 55-DMA at 0.7194 that it tumbled below last week.

More decent data out of China and a recovery in commodity prices also lent a hand.

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