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The dollar sat below a two-month high against major currencies

The dollar sat just below a two-month high against a basket of major currencies on Wednesday after a mixed bag of U.S. economic data slightly tempered expectations of a near-term Federal Reserve rate hike.

The Australian dollar pushed higher after the country's first-quarter economic growth exceeded market forecasts and prompted investors to scale back expectations for the Reserve Bank of Australia (RBA) to lower interest rates soon.

The Aussie dollar rose to $0.7300 at one point, pulling away from a 2-1/2 month low of $0.7145 set last week. The currency last traded at $0.7276, up 0.6 percent.

Some analysts said gains in the Australian dollar could be limited in the near-term despite the strong GDP number.


Major currencies showed limited reaction to China's latest surveys of manufacturing and services sector activity.

A private survey showed that activity at China's factories shrank for a 15th straight month in May while official surveys showed factory and services sector activity both expanding.

Against a basket of six major currencies, the U.S. dollar last traded at 95.862, staying below a two-month high of 95.968 set on Monday.

Data released on Tuesday showed that U.S. consumer spending recorded its biggest increase in more than six years in April but consumer confidence dipped and survey on business activity in U.S. Midwest also underwhelmed.

The upshot was that investors slightly lowered their expectations for a rate hike by the Federal Reserve over the near term.

The euro eased 0.1 percent to $1.1119 , staying above Monday's 2-1/2 month low of $1.1097.

The dollar held steady at 110.68 yen. The greenback had set a one-month high of 111.455 yen on Monday.

The British pound remains vulnerable, having suffered its biggest fall in more than two months the previous day as two opinion polls showed a shift among British voters towards leaving the European Union.

The pound was steady at $1.4483, having fallen 1.1 percent on Tuesday.


Reuters.com
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Armweeklynews [01.06.2016]
The dollar sat below a two-month high against major currencies