Investing.com - The dollar moved higher against a basket of other major currencies on Tuesday as investors looked ahead to a report by the Institute of Supply Management on U.S. service sector activity due for release later in the day.
The dollar regained ground after slipping in the wake of Friday’s U.S. employment report, which showed that jobs growth slowed slightly in July prompting investors to curtail expectations on the timing of a possible rate hike by the Federal Reserve.
EUR/USD was down 0.23% to 1.3391 from around 1.3420 before the release of a series of lackluster service sector activity reports from across the currency bloc.
Service sector activity in Italy grew at a slower pace than expected in July. Service sector activity in German and Spain grew last month, while the expansion in the French service sector remained marginal.
The euro zone’s services PMI came in at 54.2, up from 52.2 in June, but slowing slightly from a preliminary reading of 54.4.
The data added to the view that the recovery in the euro zone is losing momentum as investors looked ahead to the outcome of the European Central Bank’s monetary policy meeting on Thursday.
The dollar gained ground against the yen and the Swiss franc, with USD/JPY rising 0.11% to 102.67 and USD/CHF adding 0.29% to trade at almost seven-month highs of 0.9092.
GBP/USD was almost unchanged, off the session highs of 1.6888 hit earlier after data showed that the U.K. services sector expanded at the fastest rate in eight months in July.
The robust data added to the view that the deepening economic recovery in the U.K. would prompt the Bank of England to raise interest rates before the end of 2014.
The Australian dollar slipped, with AUD/USD down 0.14% to 0.9320. Earlier Tuesday, the Reserve Bank of Australia left rates unchanged at 2.5% and indicated that rates are likely to remain on hold for longer.
NZD/USD dipped 0.06% to 0.8516, while USD/CAD was up 0.38% to a two-month high of 1.0947.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, up 0.19% to 81.55, not far from last week’s 10-month peaks of 81.66.