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US dollar rally sputters on profit-taking, quarter-end positioning
[NEW YORK] The US dollar slipped against a basket of currencies on Thursday, snapping a three-day winning streak, as investors looked to take profits on the greenback's rally this week ahead of the end of the quarter.
The US dollar index, which tracks the greenback against six major currencies, was down 0.23 per cent at 93.143. The index was coming off its strongest three-day performance in nine months and is still up about one per cent this week.
"We had a big move yesterday. For us to take some of that back makes sense," said Brad Bechtel, managing director FX at Jefferies in New York.
On Wednesday, the US dollar rose against other major currencies after President Donald Trump proposed the biggest shake-up of the US tax system in three decades.
Mr Bechtel warned against reading too much into Thursday's decline, some of which he said may reflect investors' making quarter-end adjustments to positioning.
"There is a little bit of lack of direction today," said Alfonso Esparza, senior currency analyst at Oanda in Toronto.
"The market is taking a breather before next week," he said.
The release at the end of next week of the monthly non-farm payrolls report is being awaited by traders for clues to the timing of the next US interest rate hike.
Federal Reserve Chair Janet Yellen said on Tuesday that the US central bank needs to continue gradual rate hikes despite broad uncertainty about the path of inflation.
Data on Thursday that showed the US economy grew a bit faster than previously estimated in the second quarter drew little reaction from the US dollar.
Meanwhile, Britain's pound hit a high for the day against the weakening US dollar after Britain's Brexit secretary, David Davis, said that "considerable progress" had been made on Brexit talks.
Sterling was up 0.39 per cent to US$1.3436.
The Canadian dollar gained on its US counterpart, after earlier touching a four-week low, helped by steadier oil prices.