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Dollar, Pound Slip on Weak Economic Data

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The greenback slipped against a basket of other major currencies Wednesday, but still managed to stay ahead of the pound, which is hurting due to weak manufacturing data out of the U.K. Mixed economic data out of the U.S. is still weighing on the dollar.

New data released on Tuesday showed that consumer spending in the U.S. rose at the fastest pace in seven years in April. Consumer confidence, however, slipped. A measure of business activity in Chicago all but disappeared.

The mixed economic data has pushed back expectations that the Federal Reserve will raise interest rates in June.

In Europe, the pound slipped after a report from the research group Markit showed the manufacturing purchasing managers’ index remained flat in the euro zone for May, holding steady at 51.5.

The U.K. manufacturing PMI climbed to 50.1, up from a reading of 49.4 in April. Economists were expecting a reading of 49.6. The reading was just slightly above the 50.0 mark that separates growth from contraction.

The report showed that market sentiment was positive for manufacturers, particularly for consumer goods producers. However, soft global demand continued to weigh on export orders.

The Organization for Economic Cooperation and Development slashed its forecast for economic growth in the U.K. to 1.7%, down from 2.1%. The news put the pound under further pressure.

The organization also warned that if Britain decides to exit the EU, the move would have a serious impact on the global economy.

The pound moved lower against the euro, with EUR/GBP at 0.7713.

The dollar was higher against the pound, with GBP/USD at 1.4457, but lower against the euro, with EUR/USD at 1.1159. The greenback also slipped against the Swiss franc, with USD/CHF at 0.9918, but held steady against the Canadian Dollar, with USD/CAD at 1.3094.

The U.S. dollar index slipped 0.26% to 95.58 on Wednesday, down from its 95.96 peak on Monday.