Investing.com - The dollar regained ground against the other major currencies in subdued trade on Wednesday, but gains were expected to remain limited as investors continued to digest the fact that the Federal Reserve is unlikely to raise interest rates this year.
The dollar was lower against the yen, with USD/JPY down 0.21% at 119.97.
The Bank of Japan refrained from expanding its stimulus program on Wednesday but there is still speculation the central bank could ease monetary policy at its October meeting.
Data last month showed that core inflation in Japan fell for the first time since the BoJ launched its $1.4 trillion quantitative easing program in 2013 in a bid to bolster growth and end years of deflation.
Meanwhile, the dollar remained under pressure by diminished expectations for a rate hike by the Federal Reserve this year in the wake of last Fridays unexpectedly weak U.S. jobs report for September.
The dollar was higher against the euro, with EUR/USD sliding 0.28% to 1.1240.
The euro came under pressure earlier, after data showing that German industrial production fell at the fastest rate in a year in August, adding to concerns that a slowdown in global growth is spreading to the euro area’s largest economy.
German industrial output fell 1.2% from a month earlier, missing forecasts for a 0.2% increase.
The report came a day after data showing that German factory orders unexpectedly fell 1.8% in August.
Elsewhere, the dollar was lower against the pound, with GBP/USD up 0.45% at two-week highs of 1.5296 and was higher against the Swiss franc, with USD/CHF rising 0.38% to 0.9704.
The Office for National Statistics reported on Wednesday that U.K. industrial production rose 1.0% from a month earlier, well ahead of expectations for a 0.3% increase.
Industrial output rose 1.9% from a year earlier, compared to expectations for a 1.2% increase.
Manufacturing production was up 0.5% from a month earlier, the ONS said, but was down 0.8% on a year-over-year basis.
The Australian and New Zealand dollars were stronger, with AUD/USD gaining 0.63% to a two-week high of 0.7212 and with NZD/USD rallying 1.38% to a six-week peak of 0.6633.
Meanwhile, USD/CAD eased 0.08% to 1.3021, off two-month lows of 1.2972 hit earlier in the day.
Statistics Canada reported on Wednesday that building permits dropped 3.7% in August, confounding expectations for a 0.8% rise. Building permits gained 0.7% in July, whose figure was revised from a previously estimated 0.6% decline.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.15% at 95.66.