Investing.com - The dollar edged higher against the other major currencies on Wednesday, but remained within close distance of a five-week trough as declining expectations for a U.S. rate hike in 2016 continued to weigh.
USD/JPY rose 0.33% to trade at 101.21, off Tuesday’s three-week low of 100.65.
The greenback found mild support after the Commerce Department said on Tuesday that personal spending increased more than expected, by 0.4% in June, while household spending also climbed 0.4% in May.
The report also showed that personal income rose 0.2%, falling short of forecasts of 0.3% growth.
But the greenback remained under pressure after Dallas Fed head Robert Kaplan urged caution on raising U.S. interest rates amid a raft of risks facing the global economy.
Expectations for a U.S. rate hike before the end of year also declined last week’s surprisingly weak U.S. second quarter growth data.
Meanwhile, the yen gave back some gains posted after Japanese Prime Minister Shinzo Abe’s cabinet announced a fresh stimulus package on Tuesday in a move to boost the economy.
The package includes ¥13.5 trillion in fiscal measures, while actual new, direct spending will total about ¥7.5 trillion, most of it over the next two years.
EUR/USD slipped 0.26% to 1.1195, pulling away from Tuesday’s five-week peak of 1.1236.
The pound also edged lower, with GBP/USD down 0.13% at 1.3337, while USD/CHF gained 0.45% to 0.9685.
Research group Markit said on Wednesday that its U.K. services purchasing managers’ index dropped to 47.4 last month from a reading of 52.3 in June. It was the lowest level since December 2012.
The weak data added to expectations for a rate cut by the Bank of England’s at its policy meeting on Thursday.
The Australian and New Zealand dollars were weaker, with AUD/USD down 0.35% at 0.7584 and with NZD/USD retreating 0.90% to 0.7179.
Elsewhere, USD/CAD added 0.13% to 1.3128.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.24% at 95.25, just off the previous session’s five-week lows of 94.94.