Foreign exchange – Greenback hits 1-week lows as price hike hopes ebb

© Reuters.  Dollar hits 1-week lows as traders re-evaluate Fed rate hike hopes© Reuters. Dollar hits 1-week lows as traders re-evaluate Fed rate hike hopes

Investing.com – The dollar slid to one-week lows against a basket of the other major currencies on Wednesday as prompted investors to push back expectations on the timing of the next rate hike from the Federal Reserve.

The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.66% to 95.43, the lowest level since August 3.

The greenback lost momentum after data on Tuesday showed that U.S. worker productivity fell in the second quarter of this year, the third straight quarterly decline.

The weak data indicated that wage growth may remain sluggish, clouding the inflation outlook.

Traders re-evaluated expectations on the timing of the next rate hike by the U.S. central bank after last Friday’s much stronger than forecast U.S. jobs report rekindled hopes for a rate hike before the end of this year.

Higher interest rates typically boost the dollar by making it more attractive to yield seeking investors.

The dollar was sharply lower against the yen for a second day, with down 0.85% to 101.01.

The euro pushed higher, with advancing 0.61% to 1.1182.

The decline in the dollar also boosted sterling, with rising 0.54% to 1.3077.

The pound fell on Tuesday after the aimed at bolstering the economy.

The BoE fell £52m short of its £1.17 billion target when it failed to find enough sellers.

The bank said Wednesday it would delay making up the shortfall for three to six months.

The Swiss franc was higher, with down 0.48% at 0.9762.

The commodity linked currencies were also broadly higher, with the Australian dollar hitting highs not seen since April.

rose 1.04% to 0.7750 while was up 1.28% at 0.7257 ahead of a rate review by the country’s central bank on Thursday.

was down 0.87% at 1.3003.

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