The dollar traded little changed against a basket of currencies on Wednesday as data showed the U.S. services sector expanded at its fastest pace in 10 years, supporting the view the Federal Reserve would raise interest rates in September.
The surprisingly strong reading on industries that account for more than two-thirds of the U.S. economy aligned with comments from Atlanta Fed chief Dennis Lockhart published on Tuesday. In an interview with the Wall Street Journal, Lockhart expressed support for the end of the Fed's near-zero rate policy next month.
Read MoreUS service sector activity hits 10-year high: ISM
Lockhart is a voter on the U.S. central bank's policy-setting committee this year. His reputed centrist view is seen in line with Fed Chair Janet Yellen's.
"The ISM services number was very good and that put a bid under the dollar," said Kathy Lien, managing director at BK Asset Management in New York.