The dollar remained on the back foot on Wednesday after tumbling versus major peers overnight as a benign reading for U.S. producer prices reinforced bets on Federal Reserve interest rate cuts this year.
New Zealand's dollar dropped sharply from a four-week high after the Reserve Bank of New Zealand reduced the key cash rate and flagged more cuts to come, surprising some market participants.
The yen strengthened against the dollar, buoyed by lower U.S. bond yields, with crucial U.S. consumer price index figures looming later on Wednesday.
The dollar index - which measures the currency against six major rivals, including sterling, the euro and the yen - was steady at 102.61 as of 0315 GMT, after slumping 0.49% overnight.
Traders were already certain that the Federal Open Market Committee (FOMC) would lower rates at its September meeting before the producer price data, but ramped up bets for a super-sized 50 basis point cut to 53.5% from 50% a day earlier, according to CME's FedWatch Tool.
The Aussie edged down 0.23% to $0.66185 in sympathy with the kiwi, after earlier rising to $0.66395 for the first time since July 23.
Sterling was steady at $1.2862 following a 0.76% rally on Tuesday when it got an additional boost from data showing a surprise drop in the UK's jobless rate.
The euro was flat at $1.0991 after rising to $1.099975 on Tuesday for the first time since Aug. 5.
The dollar dropped 0.31% to 146.40 yen, with U.S. 10-year Treasury yields edging down to 3.85% in Asian hours, after declining 5.5 basis points overnight.
Source: Reuters
