The U.S. dollar was treading water against other major currencies on Wednesday as traders waited for the release of minutes from the Federal Reserve's last meeting that could offer clues to the outlook for interest rates.

Australia's dollar fell in line with the Chinese yuan after data showed China's services activity expanded at the slowest pace in five months in June, the latest sign of a sputtering post-pandemic recovery in the world's second-largest economy.

The dollar index - which measures the currency against a basket of six other major currencies including the euro and Japan's yen - was flat on the day at 103.04, having held in a range of roughly 102.75-103.75 since early June.

The Federal Open Market Committee is due to release the minutes from its most recent policy meeting later on Wednesday.

Markets are pricing in an 86% chance that the Fed will raise rates by another quarter-point in July and a near-20% chance of another 25-basis point increase in September.

Investors will scour the minutes for any indications of the Fed's thinking, but Friday's monthly employment report will almost certainly carry more weight, analysts said.

The euro rose 0.1% to $1.0891, while sterling was steady at $1.2715.

The dollar hovered around 144.62 yen, below the 145 level that prompted intervention by Japanese authorities last autumn. The greenback had last week briefly popped as high as 145.07 for the first time since November.

The dollar-yen rate has broadly moved in synch with the U.S. 10-year Treasury yield , which was roughly unchanged on the day at 3.851% after resuming trade following Tuesday's Independence Day holiday.

RBC's Cole said his team's model had placed a 25% chance on there being intervention in the yen, though much would hinge on the pace of the currency's changes, rather than the level alone.

The Australian dollar fell 0.3% to $0.6674, putting it on course to snap a four-day streak of gains.

Source : Reuters