The U.S. dollar extended its early rally on Wednesday, as U.S. private sector jobs growth surpassed expectations in September, reinforcing hopes that the Federal Reserve is on track to raise rates this year.
The payroll processor ADP released showing stronger than expected private sector job growth in the month of September, driven by strong jobs growth at large businesses.
The report said private sector employment jumped by 200,000 jobs in September following a downwardly revised increase of 186,000 jobs in August.
Economists had expected an increase of about 190,000 jobs, which would have matched the job growth originally reported for the previous month.
The ADP data is seen as a prelude to Friday’s nonfarm payrolls numbers for September, which includes both public and private sector jobs. Economists predict the U.S. economy to have created 200,000 jobs this month, compared to 173,000 in August. The unemployment rate is seen unchanged at 5.1 percent, the lowest since April 2008.
The Fed Chair Janet Yellen will speak at the St. Louis Fed community banking research and policy conference later in the day. Her words will be closely scrutinized for further signs of Fed policy in the coming months.
The greenback has been trading higher against the franc, yen and the euro in the European session. Against the pound, the greenback moved down.
Subsequent to the data, the greenback added 0.5 percent to 0.9761 against the Swiss franc, a 2-day high, from 0.9709 hit late New York Tuesday. On the upside, 0.985 is possibly seen as its next resistance level.
Switzerland’s leading index that signals future course of economic activity dropped slightly in September, according to survey results from the KOF Swiss Economic Institute.
The economic barometer fell to 100.4 in September from revised 101.2 in August. Economists had forecast a reading of 101.
Extending early rise, the greenback appreciated by 0.5 percent to hit a 2-day high of 1.1184 against the euro. The euro-greenback was worth 1.1245 when it finished Tuesday’s trading. If the greenback continues rise, it may locate resistance around the 1.10 zone.
Flash data from Eurostat showed that Eurozone inflation turned negative in September for the first time in six months.
Consumer prices fell unexpectedly by 0.1 percent year-on-year in September, offsetting a 0.1 percent rise in August. Economists had forecast prices to remain flat.
The greenback remained firm around an early 2-day high of 120.34 against the Japanese yen. At Tuesday’s close, the pair was valued at 119.72.
Japan’s housing starts increased for the sixth consecutive month in August, data from the Ministry of Land, Infrastructure, Transport and Tourism showed.
Housing starts grew 8.8 percent in August from last year, faster than the 7.4 percent increase in July and 7.6 percent rise forecast by economists.
After falling to a 2-day low of 1.5213 against the pound at 6:40 am ET, the greenback reversed direction with the pair trading at 1.5153. The greenback is seen finding resistance around the 1.50 mark.
Data from the Office for National Statistics showed that the U.K. economy grew as initially estimated in the second quarter.
Gross domestic product grew 0.7 percent from the first quarter, unrevised from the second estimate published on August 28. It was faster than the 0.4 percent expansion seen in the first quarter.
The greenback bounced off to 0.6359 against its NZ counterpart, from a low of 0.6392 hit at 4:30 am ET. The next possible resistance for the greenback may be seen around the 0.62 area. The pair closed Tuesday’s trading at 0.6344.
Looking ahead, U.S. weekly crude oil inventories report for the week ended September 25 and U.S. Chicago PMI for September are due shortly.
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