Investing.com - The dollar edged lower against the other major currencies on Friday after U.S. second quarter growth was revised down slightly, as traders remained cautious ahead of a key speech by Federal Reserve Chair Janet Yellen later in the day.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, dipped to 94.53 from around 94.59 earlier.
The Commerce Department said U.S. economic growth for the second quarter was revised slightly to an annual rate of 1.1%, from an earlier estimate of 1.2%.
The dollar remained on the defensive as traders waited to see if the speech by the Fed chief at the Jackson Hole central bank symposium later Friday would provide any fresh indications on the future path of U.S. interest rates.
Yellen could restate the hawkish view of the U.S. economy expressed by Fed officials in recent weeks or echo the minutes of the Fed’s July meeting, which indicated that officials are divided on when to raise rates.
Recent upbeat comments by Fed officials were seen as boosting the prospects for a rate hike this year.
On Sunday Fed Vice Chair Stanley Fischer said inflation is within “hailing distance” of the bank’s 2% target.
The remarks came after speeches last week from San Francisco Fed head John Williams and New York Fed chief William Dudley indicating that the central bank thinks the economy is strong.
The U.S. central bank raised interest rates for the first time in almost a decade in December.
Expectations of higher interest rates typically boost the dollar by making it more attractive to yield seeking investors.
The euro moved higher following the GDP data, with EUR/USD rising 0.17% to 1.1300.
The dollar extended losses against the yen, with USD/JPY down 0.3% to 100.23.
Sterling also pushed higher, with GBP/USD easing up 0.2% to 1.3217..
Earlier Friday, data confirmed that the U.K. economy grew by 0.6% in the second quarter and expanded 2.2% on a year over year basis, in line with preliminary readings and economists’ forecasts.
The data indicated that the U.K. economy remained strong ahead of the Brexit referendum.