The U.S. dollar edged down against its major opponents in European morning deals on Wednesday, as investors paused for breath, after its strong rally yesterday.
The U.S. GDP grew at a robust 5.0 percent pace in the third quarter, the fastest in 11 years, and a measure of consumer sentiment increased in December to its highest level in nearly eight years, separate reports showed yesterday.
Strong GDP data revived the prospects of higher interest rates from the Federal Reserve, which last week gave an upbeat assessment of the economy.
The dollar rallied overnight on the data, which reinforced bets that the Federal Reserve would raise interest rates before other major central banks do.
With economic calendar being light, investors await U.S. jobless claims data later in the day for further clues to the health of the world's largest economy.
Meanwhile, trading activity was subdued ahead of the Christmas holiday break.
The greenback that ended yesterday's trading at 0.9876 against the franc and 1.2171 against the euro edged down to 0.9855 and 1.2199, respectively. If the greenback extends decline, it may find support around 0.975 against the franc and 1.23 against the euro.
The greenback fell to 1.5550 against the pound, compared to 1.5517 hit at yesterday's close. Next key support for the greenback may be eyed around the 1.56 area.
The greenback held steady against the yen, after declining to 120.27 in Asian deals. The pair was worth 120.66 at yesterday's close.
The U.S. currency fell back to 0.7734 versus the NZ unit, compared to Tuesday's closing value of 0.7706. The next possible downside target for the greenback is likely seen around the 0.78 mark.
The greenback pared gains against the Canadian dollar, trading at 1.1605, down from an early high of 1.1629. Continuation of the greenback's downtrend may take it to a support around the 1.15 level.
The material has been provided by InstaForex Company – www.instaforex.com