Investing.com - The Australian and New Zealand dollars moved lower against their U.S. counterpart on Wednesday, as the greenback regained some strength although gains were expected to remain limited.
AUD/USD eased 0.08% to 0.7954, just off a fresh four-month high of 0.7999 hit overnight.
The greenback moderately recovered from sharp losses posted amid concerns the global economic recovery will outpace U.S. growth and prompt other major central banks, led by the European Central Bank to begin unwinding loose monetary policy at a faster pace than expected.
Expectations that the ECB could soon start to scale back its monetary stimulus program received a boost on Monday after ECB Governing Council member Ardo Hansson said bond purchases could end in one step in September if the economy and inflation develop as expected.
Market participants were also focusing on the risk of a potential U.S. government shutdown on Saturday.
Fresh political tensions in Washington following comments by President Donald Trump on immigration dampened the prospects that a broad spending and immigration deal can be reached by the end of the week, raising the possibility of a government shutdown.
In Australia, data earlier showed that consumer sentiment increased 1.8% in January, after a 3.6% climb the previous month.
NZD/USD slid 0.36% to trade at 0.7242.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.25% at 90.45 by 02:15 a.m. ET (06:15 GMT), after hitting a fresh three-year trough of 89.98 overnight.