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Dollar snaps 3-day winning streak

Key Points
  • Dollar snaps three-day winning streak
  • Greenback reacts little to Q2 GDP data
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The 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 dollar index, which tracks the greenback against six major currencies, was down 0.25 percent at 93.13. The index was coming off its strongest three-day performance in nine months and is still up about 1 percent this week.

Dollar strength ‘not going to last for very long,’ strategist says

"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 dollar rose against other major currencies after President Donald Trump proposed the biggest shake-up of the U.S. tax system in three decades.

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 U.S. interest rate hike.

CIO sees more upside for European equities

Federal Reserve Chair Janet Yellen said on Tuesday that the U.S. central bank needs to continue gradual rate hikes despite broad uncertainty about the path of inflation.

Data on Thursday that showed the U.S. economy grew a bit faster than previously estimated in the second quarter drew little reaction from the dollar.

Meanwhile, Britain's pound hit a high for the day against the weakening dollar after Britain's Brexit secretary, David Davis, said that "considerable progress" had been made on Brexit talks.

Sterling was down 0.01 percent at $1.3437 after rising 0.39 percent earlier in the day.

The Canadian dollar gained on its U.S. counterpart, after earlier touching a four-week low, helped by steadier oil prices.