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On Thursday, the dollar inched away from a 15-month low versus a basket of currencies, but was still looking shaky due to doubts about whether there will be another U.S.A. interest rate hike this year.

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U.S. Dollar

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 92.77 after slipping to 92.41 on Wednesday, its lowest since May 2016.

The greenback has been weighed down by political chaos gripping Washington and by largely uninspiring U.S. economic data, particularly sluggish inflation, which is adding to uncertainty about the pace of future Federal Reserve policy tightening.

The dollar had been supported by the Fed’s gradual policy tightening since late 2015, but the prospect that other major central banks may join it in tightening monetary policy has also fed into dollar weakness.

Investors were looking ahead to Friday’s non-farm payrolls report for July to measure whether the U.S. economy is strong enough for the Fed to stick to its planned tightening path.

On Wednesday, data showed that the U.S. private sector added 178,000 jobs in July, below economists' expectations, but still on territory consistent with a strengthening labor market.

In June, personal consumption expenditure accelerated $8.1 billion, or 0.1%.

The dollar was a touch lower against the yen, with USD/JPY at 110.61, moving back towards a low of 109.92 yen set earlier this week, which was its lowest in more than six weeks.

Overall, the yen will probably be weighed down by the Bank of Japan’s loose monetary policy, said Heng Koon How, head of market strategy for United Overseas Bank.

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About Euro

The euro eased 0.1% to $1.1847, backing away from a  2 ½ -year high of $1.19105 set on Wednesday, the common currency’s highest level since January 2015.

In contrast to the political risks and monetary policy uncertainty that have weighed down the dollar, the euro has drawn support from expectations that the European Central Bank would eventually start scaling back its monetary stimulus program in the autumn which continued to underpin demand for the single currency.

“There are lower expectations for tighter monetary policy out of the Federal Reserve and higher expectations for more tightening out of the European Central Bank.”

Against the yen, the euro slipped 0.2% to 131.08 yen, pulling back from Wednesday’s high of 131.40 yen, the euro’s strongest against the yen since February 2016.

Other News

Sterling remained close to Wednesday’s 11-month high of 1.3250, with GBP/USD last at 1.3233 ahead of the Bank of England’s monetary policy meeting due later on Thursday.

The Bank of England appears set to keep interest rates at a record low once again, with investors looking for cues that, faced with Brexit, it is getting nearer to raising rates for the first time in  a decade.

The pound last changed hands at $1.3220. On Wednesday, it increased to $1.3250, its higher in nearly 11 months.

On Wednesday, oil prices edged higher as surging U.S.A. fuel demand and strong refinery run offset data from the Energy Department that showed crude inventories did not fall as much as expected last week.

U.S. West Texas Intermediate crude was up 0.9%, to settle at $49.59 a barrel, after declining to a low of $48.55 earlier in the session.

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