The dollar hovered near three-week lows on Tuesday after soft U.S. economic data undermined the case for an early Federal Reserve rate hike, while the Australian dollar slipped briefly after the Reserve Bank of Australia cut interest rates.

The dollar index against a basket of six major currencies stood at 95.642, having come down as much as 95.384 the previous week when it posted its biggest fall in three months.

The index has struggled to stage a meaningful recovery since the release of very weak U.S. economic growth data for the June quarter late last week.

Monday’s weaker-than-expected manufacturing data continued to hold the greenback down. The influential Institute for Supply Management’s (ISM) index of national factory activity dropped to 52.6 in July from 53.2 in June, below market expectations of 53.0.

Fed funds futures are pricing in less than a 40 per cent chance of an interest rate hike by December.