Investing.com - The dollar eased off session lows against other major currencies on Wednesday, helped by the release of strong U.S. service sector activity and jobs data, while investors awaited a speech by Federal Reserve Chair Janet Yellen scheduled later in the day.
The greenback found support after the Institute of Supply Management said U.S. service sector activity expanded at its fastest rate in 12 years in September.
The report came shortly after payrolls processor ADP said the U.S. private sector added 135,000 jobs last month, beating analyst's projections.
But sentiment on the greenback remained fragile amid speculation the next Fed head could be less hawkish than expected continued to weigh.
Fed Governor Jerome Powell and former governor Kevin Warsh were both interviewed at the White House last week to replace current Fed Chair Janet Yellen next February.
The two men are seen as serious candidates, but Powell is considered as more dovish than Warsh, who has criticised the Fed's bond-buying programme in the past.
Fed Chair Yellen was due to deliver a speech at a community banking conference hosted by the Federal Reserve Bank of St. Louis at 3:15 p.m. ET (19:15 GMT). Her comments were expected to be closely watched for any hints on the timing of the next rate hike.
EUR/USD edged up 0.13% to 1.1758 but gains were capped by ongoing political turmoil in Spain.
Spain's King Felipe VI accused Catalan secessionist leaders of shattering democratic principles and dividing Catalan society on Tuesday, while the head of Catalonia's government Carles Puigdemont said the region will declare independence in a matter of days.
Market participants were also looking ahead to a speech by European Central Bank President Mario Draghi, scheduled at 1:15 p.m. ET (17:15 GMT).
The pound remained higher, with GBP/USD up 0.38% at 1.3285, after data earlier showed that the UK's services sector expanded at a faster rate than expected in September.
Elsewhere, the yen was also stronger, with USD/JPY down 0.14% at 112.70, while USD/CHF held steady at 0.9737.
The Australian and New Zealand dollars were still on the upside, with AUD/USD up 0.24% at 0.7854 and with NZD/USD adding 0.10% to 0.7167.
Meanwhile, USD/CAD was down0.10% at 1.2475, not far from the previous session's one-month peak of 1.2538.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.16% at 93.26 by 11:00 a.m. ET (15:00 GMT), off session lows of 93.09 and still close to a one-and-a-half month high of 93.78 hit on Tuesday.