By Shinichi Saoshiro

TOKYO (Reuters) - The dollar was firm on Wednesday after upbeat U.S. data tempered expectations of aggressive policy easing by the Federal Reserve later this month, while the struggling pound and euro also provided additional impetus to the greenback.

The dollar index ( ) against a basket of six major currencies was effectively unchanged at 97.363 after gaining 0.5% the previous day.

The dollar rose after stronger-than-expected June U.S. retails sales data reduced the chance of the Fed cutting interest rates by 50 basis points rather than 25 basis points at its month-end policy review.

"The strong U.S. data is a key driver behind the dollar's latest gains, but weakness in European currencies, notably the pound and euro, is also playing a significant role as well," said Junichi Ishikawa, senior FX strategist at IG Securities.

The pound retreated to a 27-month low of $1.2396 overnight as Boris Johnson and Jeremy Hunt, the two candidates to be Britain's next prime minister, vied to outgun each other on taking a harder Brexit stance. [GBP/]

Sterling last traded little changed at $1.2411.

The euro ( ) was steady at $1.1212 after losing more than 0.4% the previous day. The losses came after a survey by the ZEW institute showed that the mood among German investors deteriorated more sharply than expected in July amid an unresolved trade dispute between China and the United States as well as political tensions with Iran.

The dollar was almost flat at 108.215 yen after advancing 0.3% against the yen overnight on the strong U.S. retail sales data.

The Australian dollar edged up 0.05% to $0.7016, having lost 0.4% on Tuesday following comments by U.S. President Donald Trump.

The United States still has a long way to go to conclude a trade deal with China but could impose tariffs on an additional $325 billion worth of Chinese goods if it needed to do so, Trump said.

The Aussie is sensitive to the economic fortunes of China, Australia's largest trading partner.

The impact of Trump's comments on other major currencies, however, was limited.

"The U.S.-China trade row is not at the center of the market's attention right now. Focus is on the Fed's policy, U.S. data and their impact on yields," Ishikawa at IG Securities said.