Investing.com - The dollar dipped against a basket of the other major currencies on Wednesday while the euro moved higher after survey data indicating that the recovery in the euro area remains solid.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, dipped 0.1% to 93.33 by 04.16 a.m. ET (08.16 a.m. GMT).
The euro gained ground, with EUR/USD rising 0.19% to 1.1782 after survey data showing that a strong performance from the euro zone manufacturing sector this month offset slower growth in services.
The euro showed little reaction to a speech by European Central Bank President Mario Draghi in which he defended unconventional monetary policy and said that central banks should continue preparing for new challenges.
The speech came ahead of his appearance at the annual central banking conference in Jackson Hole on Friday. Draghi is not widely expected to deliver any new policy message in his speech despite speculation over how soon the central bank plans to start scaling back its stimulus program.
The dollar was lower against the yen, with USD/JPY slipping 0.16% to 109.39, still holding above last week's low of 108.59, which was the weakest level in four months.
The dollar came under pressure against the Japanese currency overnight following remarks from U.S. President Donald Trump, who raised the prospect of a government shutdown.
Speaking at a rally Trump referred to his vow to build a wall along the U.S.-Mexican border saying, "If we have to close down the government, we are building that wall."
Trump also warned that he might terminate the NAFTA trade treaty with Canada and Mexico after first round talks aimed at revamping the trade pact ended with few signs of progress.
The greenback has weakened recent sessions amid renewed investor concerns about the Trump administration's ability to deliver on its economic policy agenda.
Persistent doubts about the prospects for a third interest rate hike by the Federal Reserve this year have also fed into dollar weakness.
Lower rates typically weigh on the dollar by making U.S. assets less attractive to yield-seeking investors.
Market participants were awaiting comments from Fed Chair Janet Yellen at Jackson Hole on Friday for clues on how policymakers view the economy. Some investors believe Yellen may make the case for a third rate hike this year.
The euro rose to fresh 10-month highs against the broadly weaker sterling, with EUR/GBP climbing 0.38% to 0.9207.
The pound was also lower against the greenback, with GBP/USD down 0.2% to 1.2797.
Sterling has been pressured lower by growing expectations that the Bank of England will keep interest rates on hold in the coming months amid concerns over the economic impact from Brexit.