Investing.com - The dollar extended losses against the other major currencies on Tuesday, after data showing that U.S. service sector activity grew at a slower pace than expected in August further dampened expectations for a U.S. rate hike before the end of the year.
EUR/USD climbed 0.86% to at 1.1244.
The Institute of Supply Management said its non-manufacturing purchasing manager's index fell to 51.4 last month from 55.5 in July. Analysts had expected the index to drop to 55.0.
The data came after downbeat U.S. employment data published last Friday crushed expectations for an upcoming rate hike by the Federal Reserve.
Earlier Tuesday, data showed that German factory orders rose 0.2% in July, confounding expectations for a 0.5% increase. Factory orders ticked down 0.3% in June, whose figure was revised from a previously reported 0.4% fall.
Market participants were looking ahead to the European Central Bank’s policy meeting on Thursday, amid speculation over potential stimulus measures.
GBP/USD advanced 0.95% to a fresh one-and-a-half month high of 1.3429.
USD/JPY tumbled 1.14% to 102.26, while USD/CHF declined 0.72% to 0.9728.
The Australian and New Zealand dollars pushed higher, with AUD/USD up 1.23% at 0.7675 and with NZD/USD rallying 1.41% to 0.7407.
In a widely expected moved, the Reserve Bank of Australia held its benchmark interest rate at 1.50% at the conclusion of its policy meeting on Tuesday.
Earlier in the day, the Australian Bureau of Statistics said the current account deficit widened to A$15.5 billion in the second quarter from A$14.9 billion in the first quarter, whose figure was revised from a previously estimated deficit of A$20.8 billion.
Analysts had expected the current account deficit to hit A$19.8 billion in the last quarter.
Elsewhere, USD/CAD slid 0.71% to 1.2837, the lowest since August 26.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.86% at 94.92, the lowest since August 26.