Investing.com - The dollar bounced back against the other major currencies on Thursday, erasing earlier losses posted amid doubts of an additional U.S. rate hike this year, as investors turned to a fresh string of U.S. economic reports due later in the day.
The greenback weakened after the minutes of the Federal Reserve’s July policy meeting showed that members of the central bank remain divided over the need to raise interest rates further this year, citing low inflation.
The minutes were released after disappointing U.S. housing sector data dampened recent optimism over the strength of the economy.
The greenback was also hit by fresh political tensions in Washington after U.S. President Donald Trump disbanded two high-profile business advisory councils, sparking concerns over the administration’s ability to implement his economic reforms.
The move came after several chief executives quit in protest over his remarks blaming weekend violence in Virginia not only on white nationalists but also on anti-racism activists who opposed them.
EUR/USD slipped 0.25% to 1.1735 after data showed that euro zone inflation was unchanged in July.
Market participants were also looking ahead to the minutes of the European Central Bank’s latest policy meeting, expected later in the trading session, for potential indications on when the central bank will begin tapering its asset purchase program.
The single currency had weakened broadly following reports on Wednesday that ECB President Mario Draghi will not deliver any fresh monetary policy message at the U.S. Federal Reserve's Jackson Hole conference.
The pound was steady, with GBP/USD at 1.2892, off the previous session’s one-month trough of 1.2843 after the UK Office for National Statistics said retail sales rose slightly more than expected in July.
Elsewhere, USD/JPY fell 0.20% to 109.97, while USD/CHF was almost unchanged at 0.9758.
The Australian dollar ws stronger, with AUD/USD up 0.16% at 0.7937, while NZD/USD held steady at 0.7309.
Earlier Thursday, the Australian Bureau of Statistics said the number of employed people increased by 27,900 last month, beating expectations for a 20,000 gain.
The unemployment rate hit 5.6% in July from 5.7% in June, in line with market expectations. June’s figure was upwardly revised from a previously estimated rate of 5.6%.
Meanwhile, USD/CAD eased up 0.11% to trade at 1.2632, off a nearly two-week low of 1.2588 hit overnight.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.15% at 93.55, easing off session lows of 93.22.