Investing.com - The dollar extended losses to hit a fresh five-week trough against the other major currencies on Tuesday, following news of additional stimulus measures in Japan and as lower expectations for a U.S. rate hike before the end of the year continued to weigh.
The Commerce Department said personal spending, which measures how much Americans spend, increased 0.4% in June from a month earlier. Economists had forecast an increase of 0.3%.
Household spending, which accounts for more than two-thirds of economic output in the U.S., also climbed 0.4% in May.
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.
USD/JPY tumbled 1.35% to trade at 101.03, the lowest since July 11.
The yen strengthened after Japanese Prime Minister Shinzo Abe’s cabinet announced a fresh stimulus package on Tuesday, as part of efforts 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 gained 0.46% to a five-week high of 1.1214.
The pound pushed higher, with GBP/USD up 0.86% at 1.3289, while USD/CHF slid 0.29% to 0.9657.
Investors shrugged off a report by research firm Markit and the Chartered Institute of Purchasing & Supply saying their U.K. construction purchasing managers' index fell to 45.9 in July from the previous month’s reading of 46.0.
Economists had expected the index to drop to 43.8 in last month.
The Australian and New Zealand dollars were stronger, with AUD/USD up 0.99% at 0.7613 and with NZD/USD rallying 0.92% to 0.7238.
The Aussie erased earlier losses posted after the Reserve Bank of Australia lowered its benchmark interest rate from 1.75% to a new record-low of 1.50%, in line with expectations.
Also Tuesday, the Australian Bureau of Statistics said building approvals dropped 2.9% in June, compared to expectations for a 0.5% rise.
A separate report showed that Australia’s trade deficit widened to A$3.195 billion in June from revised A$2.418 billion in May. Analysts had expected the trade deficit to narrow to A$2.000 billion in June.
Elsewhere, USD/CAD declined 0.61% to 1.3045.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.67% at 95.11, the lowest since June 24.