Investing.com - The Australian dollar reversed earlier gains despite stronger than expected GDP data and strong HSBC services PMI from China.
AUD/USD traded at 0.9265, down 0.10%, while USD/JPY changed hands at 105.22, up 0.12%.
In Australia the AIG Services August index rose 0.1 point to 49.4, just a nick above 49.3 in the previos months. GDP data for the second quarter rose 0.5%, beating the 0.4% gain expected quarter-on-quarter.
Later in the day, Reserve Bank of Australia Governor Glenn Stevens speaks.
In China, the semi-official non-manufacturing PMI for August rose to 54.4 from 54.2 in the previus month.. The HSBC services PMI jumped to 54.1 in August, from 50.0 the previous month.
Overnight, the dollar traded higher against most major currencies after a widely-watched U.S. factory gauge beat expectations, while sentiments the European Central Bank may loosen policy added to the greenback's rally.
The Institute for Supply Management reported that its manufacturing purchasing managers’ index jumped to 59.0 in August from 57.1 in July, defying analysts' calls for the index to tick down to 56.8.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
The new orders component of the index rose to 66.7, an increase of 3.3 points from 63.4 in July.
The employment index grew for the fourteenth consecutive month the report said, registering 58.1, down 0.01 points from 58.2 in July.
Also in the U.S., the Census Bureau reported earlier that U.S. construction spending rose to 1.8% in July from -0.9% in June, whose figure was revised up from -1.8%.
Analysts had expected U.S. construction spending to rise to 1.0% last month.
The numbers fueled market expectations for the Federal Reserve to wind down stimulus programs as early as next month and raise interest rates some time next year.
The euro, meanwhile, came under pressure due to ongoing expectations for the European Central Bank to loosen policy while the Fed takes steps to tighten, though bottom fishers brought the single currency off earlier lows.
The European Central Bank will hold a policy meeting on Thursday.
Geopolitical concerns capped the greenback's advance slightly.
Russian President Vladimir Putin reportedly said he could "take Kiev" in a matter of weeks, according to recent media reports, though Moscow later downplayed that statement.
Both the U.S. and Russia have accused each other of stirring up trouble in Ukraine.
Meanwhile, investors kept on eye out for the August U.S. employment report, due for release on Friday, which could contain a weather vane pointing to the future direction of monetary policy.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, up 0.04% at 83.02.
On Wednesday, the U.S. is to publish data on factory orders.