The U.S. dollar plunged against other major currencies on Wednesday amid weaker-than-expected economic data and the dovish remarks from New York Federal Reserve President William Dudley about the country's economic prospects.
Institute for Supply Management (ISM) reported Wednesday that economic activity in the U.S. non-manufacturing sector grew in January for the 72nd consecutive month, but at a slower rate. The ISM non-manufacturing index registered 53.5 percent in January, 2.3 percentage points lower than the seasonally adjusted December reading of 55.8 percent.
The latest reading was also below market consensus. Meanwhile, the Fed official Dudley said on Wednesday that policy makers are "acknowledging that things have happened in financial markets and in the flow of the economic data that may be in the process of altering the outlook for growth and the risk to the outlook for growth going forward."
Analysts said Dudley's words, along with the soft economic report, signals that the Fed may be not able to raise interest rates this year given the country's sluggish economic growth. The dollar index, which measures the greenback against six major peers, was down 1.59 percent at 97.304 in late trading.
In late New York trading, the euro rose to 1.1092 dollars from 1.0909 dollars in the previous session, and the British pound increased to 1.4598 dollars from 1.4414 U.S. dollars in the previous session. The Australian dollar inched up to 0.7178 dollar from 0.7049 dollar.
The U.S. dollar bought 117.72 Japanese yen, lower than 120.17 yen of the previous session. The U.S. dollar fell to 1.0052 Swiss franc from 1.0208 Swiss franc, and it decreased to 1.3794 Canadian dollars from 1.4024 Canadian dollars.
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