Dollar on the defensive after soft data, little relief for yen
economic data continued to point to slowing growth, although that gave little relief to the yen, which was pinned around a 38-year low that kept the market on alert for government intervention.
The euro held not far off a three-week high against the greenback, and sterling firmed ahead of UK elections later in the day.
The dollar index, which measures the greenback against a basket of peer currencies, was flat at 105.28 after briefly weakening to its lowest since June 13 at 105.04 on Wednesday.
Softer-than-expected U.S. economic data on Wednesday, including a weak services report and ADP employment report, depicted a slowing economy, following an increase in initial applications for U.S. unemployment benefits last week.
«Slowly but surely, what we're starting to see is a bit of a turn in the U.S. economic data flow,» said Rodrigo Catril, senior currency strategist at National Australia Bank (NAB).
«We think that the U.S. economy is slowing, with the labour market now starting to show signs of slackness, as well as activity and inflationary pressures easing.»
Attention now turns to the closely watched nonfarm payrolls report due on Friday, which is expected to show an increase of 190,000 jobs in June after rising 272,000 in May, according to a Reuters poll of economists.
Ahead of the jobs report, the string of weaker economic data had the market pricing in about a 68% chance of a U.S. rate cut in September versus 56% a week ago, according to the CME FedWatch tool.
U.S. Treasury yields also fell on Wednesday.
