Investing.com - The dollar edged lower against the other major currencies on Tuesday, as markets awaited the release of U.S. nonfarm payrolls on Friday for further indications on whether or not the Federal Reserve will raise interest rates in September.
EUR/USD edged up 0.25% to 1.0978.
The dollar has been boosted by expectations that the improving U.S. economy will prompt the Fed to raise short term interest rates in the coming months, possibly as early as September.
Investors were looking to the government nonfarm payrolls report, due to be released on Friday. The consensus forecast is that the report will show jobs growth of 215,000 last month.
Monthly jobs gains above 200,000 are seen by economists as consistent with strong employment growth.
The dollar softened following the release of disappointing U.S. economic reports on Monday.
Official data showed that U.S. consumer spending slowed in June and a separate report showing that manufacturing activity moderated in July.
Another report showed that U.S. construction spending rose at the slowest rate in five months in June.
The dollar was little changed against the pound, with GBP/USD at 1.5582.
Data earlier showed that the Markit U.K. construction purchasing managers’ index fell to 57.1 from 58.1 June, which was the highest level in four months. Economists had expected the index to rise to 58.4.
Elsewhere, the dollar was steady against the yen, with USD/JPY at 123.97, and slipped lower against the Swiss franc, with USD/CHF down 0.16% at 0.9677.
The Australian and New Zealand dollars were stronger, with AUD/USD rallying 1.42% to 0.7388 and with NZD/USD climbing 0.58% to 0.6601.
The Aussie was boosted after data on Tuesday showed that Australia's retail sales increased by 0.7% in June, beating expectations for a 0.5% gain.
A separate report showed that Australia's trade deficit narrowed to A$2.93 billion in June from a revised A$2.68 billion in May. Analysts had expected the trade deficit to widen to A$3.10 billion in June.
At the same time, the Reserve Bank of Australia decided to hold its benchmark interest rate at 2.00%, in a widely expected move.
Meanwhile, USD/CAD slipped 0.20% to 1.3130, pulling further away from an 11-year peak of 1.3176 hit on Monday.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.19% at 97.41.