© Reuters.  Dollar loses ground vs. rivals with geopolitical tensions in focus© Reuters. Dollar loses ground vs. rivals with geopolitical tensions in focus

Investing.com – The dollar slipped lower against the other major currencies on Wednesday, weighed by concerns over mounting tensions between the U.S. and North Korea and fresh uncertainty over the future path of U.S. interest rates.

The greenback remained under pressure after Federal Reserve official Lael Brainard said on Tuesday that the central bank should delay raising interest rates until it is confident inflation that is now “well short” of target will rebound.

The U.S. dollar had already broadly weakened after data earlier Tuesday showed that U.S. factory orders declined in July, sparking concerns over the strength of the manufacturing sector.

The safe-haven yen and Swiss franc were higher, with USD/JPY down 0.08% at 108.73 and with USD/CHF slipping 0.16% to trade at 0.9540.

Market sentiment weakened further after a North Korean diplomat on Tuesday warned that his country was ready to send “more gift packages” to the U.S.

The threat came after the rogue regime conducted its sixth and largest ever nuclear test on Sunday, prompting U.S. Defense Secretary James Mattis to say that any threat to the U.S. or its allies would be met with a “massive military response”.

EUR/USD rose 0.26% to 1.1944, while GBP/USD held steady at 1.3038, just off a four-week high of 1.3048 hit overnight.

The Australian and New Zealand dollars were lower, with AUD/USD down 0.15% at 0.7984 and with NZD/USD easing 0.08% to 0.7226.

Earlier Wednesday, the Australian Bureau of Statistics reported on Wednesday that the country’s gross domestic product expanded by 0.8% in the second quarter, below expectations for an expansion of 0.9%.

Year-on-year, the Australian economy grew 1.8% in the last quarter, disappointing expectations for an expansion of 1.9%.

Meanwhile, USD/CAD was almost unchanged at 1.2375, still close to Tuesday’s more than two-year low of 1.2336, as investors awaited the Bank of Canada’s rate decision later in the day.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.15% at 92.14 by 05:20 a.m. ET (09:20 GMT).

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