Forexpros – The U.S. dollar held modest gains against most of its major counterparts in quiet trade on Wednesday, as markets in the U.S. remained closed for a holiday, while investors focused on monetary policy decisions from the European Central Bank and the Bank of England on Thursday.
During European afternoon trade, the dollar was higher against the euro, with EUR/USD shedding 0.37% to hit 1.2561.
Investors were awaiting the outcome of the ECB’s policy meeting on Thursday, amid growing expectations for a rate cut to help bolster growth in the euro zone.
Earlier in the day, the final reading of the euro zone services purchasing managers’ index came in at 47.1 in June, slightly above the preliminary estimate of 46.8, but still below the 50 level which separates contraction from growth.
The greenback was also higher against the pound, with GBP/USD down 0.29% to hit 1.5641.
In the U.K., data showed that service sector activity expanded at the slowest rate in eight months in June, fuelling expectations for a fresh round of quantitative easing from the BoE to shore up the U.K. economy.
The Markit/CIPS Services PMI fell to 51.3 in June from a reading of 53.3 in May, missing expectations for a decline to 53.0.
Elsewhere, the greenback inched higher against the yen, with USD/JPY easing up 0.06% to 79.84, and gained ground against the Swiss franc, with USD/CHF adding 0.39% to hit 0.9562.
The greenback was little changed against its Canadian, Australian and New Zealand counterparts, with USD/CAD easing up 0.10% to 1.0130, AUD/USD dipping 0.03% to 1.0277 and NZD/USD inching down 0.05% to hit 0.8033.
The Australian dollar found support earlier after official data showed that domestic retail sales rose 0.5% in May, outstripping expectations for a 0.3% increase, after a 0.1% gain in April.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.29%, to 82.12.
Trade volumes were expected to remain light on Wednesday, with markets in the U.S. closed for the Independence Day holiday.
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