US$ falls as investors reweigh chances of rate hike

London

THE dollar fell against a basket of currencies on Wednesday as investors re-evaluated whether the Federal Reserve will raise interest rates this year, which also sent the higher-yielding Australian dollar to its loftiest level since late April.

The US dollar sagged against the euro and the yen after downbeat productivity data sapped some of the momentum it had gained from last week's robust jobs report. US Treasury yields fell after the productivity report suggested the economy may not be growing as quickly as anticipated, prompting investors to cut long-term inflation expectations. According to CME's Fedwatch, investors have trimmed chances of a rate rise in December 2016.