Investing.com - The dollar was steady against the euro and the yen on Wednesday as the threat of military strikes against Syria diminished, while the pound trimmed back gains after initially rallying on the back of strong U.K. employment data.
During European morning trade, the pound pared gains against the dollar, with GBP/USD up 0.23% to 1.5769, after rising as high as 1.5826 earlier, the highest level since February.
Sterling touched seven-month highs after the Office for National Statistics said the rate of unemployment in the U.K. ticked down to 7.7% in the three months to July from 7.8% in the previous three months.
Economists had expected the unemployment rate to remain unchanged.
The data fuelled expectations that the Bank of England may raise interest rates sooner than it has indicated.
Last month, the BoE pledged to keep interest rates on hold at current record low levels until the unemployment rate falls below 7%, something that bank does not see for another three years.
The ONS said the number of people claiming unemployment benefits fell by 32,600 in August, better than expectations for a decline of 22,000 people.
The euro was little changed near six-week highs against the dollar, with EUR/USD inching up 0.02% to 1.3268.
Investor confidence was boosted after President Barack Obama agreed Tuesday to explore a plan proposed by Russia for Syria to place its chemical weapons under international control in order to avoid a U.S. military intervention.
A recent string of upbeat economic data from China indicating that the economy is recovering from a slowdown also underpinned risk appetite.
The dollar dipped against the yen but remained supported close to two-month highs, with USD/JPY slipping 0.13% to 100.25.
The dollar also edged lower against the Swiss franc, with USD/CHF sliding 0.11% to 0.9338.
Elsewhere, the greenback was steady against its Australian, New Zealand and Canadian counterparts, with AUD/USD inching down 0.08% to 0.9305, NZD/USD edging up 0.09% to 0.8075 and USD/CAD slipping 0.16% to 1.0332.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, dipped 0.06% to 81.76.
