Dollar Weakens Ahead of Data Blitz as Yen Rallies on Rate Hike Bets

The US dollar dipped on Thursday as traders braced for a data-packed day and Federal Reserve commentary. The decline was partly due to market participants trimming big currency bets ahead of key releases, which can leave the greenback softer across peers.

Japan's yen, however, jumped on renewed bets that the Bank of Japan could raise rates soon. This led to USD/JPY sliding to 155.8912 from 158.6352 at Wednesday's US close.

Investors are looking ahead to the Bank of Japan's September 17-18 meeting, a better August services purchasing managers' index, and the possibility of officials stepping in to slow an abrupt move. The uncertainty surrounding these factors has made FX choppy near big central-bank moments.