Investing.com – The dollar remained on track to snap a three-month losing streak against a basket of major currencies despite retreating from session highs Wednesday after a raft of mostly downbeat economic data weighed on sentiment.
The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.18% to 90.48. The dollar remained on track for its first monthly gain in four months amid sharp gains during February as sentiment on a faster pace of US rate hikes improved.
The annual pace of growth in the U.S. was in the fourth quarter. While that did little to alter the narrative of solid U.S. economic growth, US surrendered gains dragging the greenback lower.
A pair of reports on housing and manufacturing, meanwhile, also added to negative sentiment.
The Chicago business barometer, a closely-watched indicator by the Institute for Supply Management (ISM) in February from 65.7 in January.
In a separate report, the Commerce Department showed pending home sales in February, a steeper decline that economists had forecast.
Downside momentum in the dollar, however, was limited by weakness in sterling.
fell 0.77% to $1.38 as Brexit concerns resurfaced. Actions Economics said both UK Prime Minister Theresa May and Northern Ireland’s DUP party rejected the European Union proposal of a “common regulatory area” in the island of Ireland in the event of a no-deal Brexit scenario.
fell 0.07% to $1.2214 while rose 0.31% to C$1.2816.
fell 0.68% to Y106.62 after the Bank of Japan’s lowered its long-bond purchases, raising expectations that the central bank was nearing a policy shift toward less accommodative monetary policy. Yet market participants expect traders to buy the dips in the USD/JPY amid positive sentiment on US interest rates.
“Given the freshened US rate outlook following Federal Reserve Chair Jerome Powell’s comments on Tuesday, and ongoing hints from the Bank of Japan that stimulus will remain in vogue for the foreseeable future, USD-JPY dip buying may remain in favor,” Action Economics said.
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