The dollar continued its retreat on Wednesday, remaining broadly lower against other major currencies despite positive U.S. data. Investors are being cautious ahead of the Federal Reserve’s policy statement due later today.
New data from the U.S. Commerce Department showed that producer prices were up 0.4% in May, higher than economist forecasts of a 0.1% increase.
The producer price index slipped 0.1% from the previous year, which was in line with expectations. Core producer prices were also up 0.3% in May, higher than the forecasted 0.1% increase.
The Federal Reserve will conclude its monetary policy meeting today. Investors will be looking for indications of when the central bank will raise rates and if it still expects to impose two rate hikes this year.
After May’s disappointing job report, the market does not expect a summer rate hike. Last month’s job report showed the slowest job growth in six years.
USD/JPY was up 0.18% to 106.30, but the dollar was lower against the euro, with EUR/USD at 1.1236.
The greenback slipped against the pound, with GBP/USD ahead 0.45% at 1.4176.
The pound saw gains on Wednesday after the U.K.’s Office for National Statistics announced unemployment rates fell from 5.1% to 5% in three months ended in April. Unemployment is now at its lowest level in over a decade.
Average wages excluding bonuses were also up 2.3% during the same period compared to last year. Economists were expecting a 2.1% rise. With bonuses included, wages were up 2% year-over-year. Economists were projecting 1.7% growth.
Despite its gains, sentiment on the sterling is still fragile as new opinion polls on the U.K. EU referendum show a tight race.
Elsewhere, the New Zealand and Australian dollars were higher. NZD/USD was up 0.63% to 0.7039 and AUD/USD rose 0.54% to 0.7399.
The greenback was little changed against the Canadian dollar, with USD/CAD holding steady at 1.2862.