Investing.com - The dollar pushed lower against a basket of other major currencies on Wednesday, after data showed that U.S. economic growth slowed more sharply than expected in the first quarter, curbing expectations for higher interest rates.
The Commerce Department reported that the U.S. gross domestic product grew just 0.2% in the three months to March, slowing from 2.2% in the final quarter of 2014. It was the slowest rate of growth in a year.
The consensus forecast among economists was for a more moderate slowdown to 1.0%.
The data came as investors were looking ahead to the Federal Reserve’s rate statement later in the day for further indications on the timing of a first rate hike.
Recent disappointing economic reports have prompted investors to push back expectations for an initial rate hike to later in the year from midyear.
Also Wednesday, the National Association of Realtors said its pending home sales index increased 1.1% last month, compared to expectations for a 1.0% gain. Pending home sales in February rose by 3.6%, whose figure was revised up from a previously reported gain of 3.1%.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last down 0.97% to 95.26, the weakest since March 18.
EUR/USD jumped 1.32% to eight-week highs of 1.1127.
The single currency was boosted after data earlier Wednesday showed that German consumer prices rose at an annual rate of 0.4% in April, broadly in line with market expectations, easing concerns over the threat of deflation in the euro area.
Separate reports showed that euro zone bank lending to the private sector ticked higher in March for the first time in three years and consumer inflation expectations rose for the first time this year.
USD/JPY held steady at 118.93, while GBP/USD advanced 0.66% to two-month highs of 1.5439. The dollar was also sharply lower against the Swiss franc, with USD/CHF down 1.59% to 0.9404.
The Australian dollar turned higher, with AUD/USD up 0.46% to 0.8057, while NZD/USD held steady at 0.7721.
Statistics New Zealand earlier reported that the country's trade surplus widened to NZ$631 million in March from NZ$50 million the previous month. Analysts had expected the trade surplus to widen to NZ$341 million last month.
A separate report showed that the ANZ business confidence index for New Zealand slipped to 30.2 this month from 35.8 in March.
Meanwhile, USD/CAD declined 0.52% to trade at 1.1970.