The dollar slipped lower on Thursday as expectations for further Federal Reserve rate cuts waned, while the euro gained ground after Eurozone private sector data boosted hopes that the bloc's economy could avoid a recession.

The dollar was down 0.2% at 1.1104 euro by 03:47 AM ET (07:47 GMT) after French and German PMI data for August came in ahead of expectations. But the reports showed that Germany's manufacturing sector remained at recession levels and activity in the service sector slowed.

Against the yen, the dollar slid 0.15% to 106.44, following a 0.36% gain on Wednesday, its biggest since Aug. 13.

Wednesday's Fed minutes that showed policymakers viewed last month's cut in interest rates as a recalibration not the start of sustained monetary easing, tempering expectations for another rate cut at the central bank's September meeting.

Investors are now looking ahead to Fed Chairman Jerome Powell's speech at Jackson Hole on Friday for signs of just how far the U.S. central bank is prepared to lower rates.

The British pound was a touch lower against the euro, on course for its second day of losses, as uncertainty about Britain's divorce from the European Union weighed on sterling.

Source : Investing.com