The dollar is down slightly against the Euro and the Japanese Yen Wednesday afternoon, but is holding onto modest gains against the British pound. The U.S. currency is little changed overall despite the release of a number of economic reports and the minutes from the most recent Federal Reserve meeting.
Many policy makers were reluctant to raise interest rates for the first time in more than a decade, according to the minutes of the December 15-16 Federal Reserve meeting.
It was a “close call” for some officials, but ultimately the FOMC voted unanimously to hike interest rates from zero.
As expected, there was “significant concern about still-low readings on actual inflation and the uncertainty and risks present in the inflation outlook.”
Private sector employment in the U.S. increased by much more than expected in the month of December, according to a report released by payroll processor ADP on Wednesday. ADP said private sector employment jumped by 257,000 jobs in December after climbing by a revised 211,000 jobs in November.
Economists had expected employment to increase by about 190,000 jobs compared to the addition of 217,000 jobs originally reported for the previous month.
Partly reflecting a notable decrease in the value of imports, the Commerce Department released a report on Wednesday showing that the U.S. trade deficit narrowed in the month of November. The Commerce Department said the trade deficit shrank to $42.4 billion in November from a revised $44.6 billion in October.
Economists had expected the deficit to widen to $44.4 billion in November from the $43.9 billion originally reported for the previous month.
Citing faster deliveries, the Institute for Supply Management released a report on Wednesday showing an unexpected slowdown in the pace of growth in U.S. service sector activity in the month of December. The ISM said its non-manufacturing index edged down to 55.3 in December from 55.9 in November, although a reading above 50 continues to point to growth in the service sector.
The modest decrease came as a surprise to economists, who had expected the non-manufacturing index to inch up to 56.2.
After reporting a notable increase in new orders for U.S. manufactured goods in the previous month, the Commerce Department released a report on Wednesday showing a modest pullback in orders in November.
The report said factory orders edged down by 0.2 percent in November after jumping by 1.3 percent in October. The modest decrease matched economist estimates.
The dollar reached an early high of $1.0707 against the Euro Wednesday, but has since dipped to around $1.0795.
Eurozone producer prices decreased at a stable pace for the second straight month in November, in line with expectations, Eurostat reported Wednesday. The producer price index fell 3.2 percent year-over-year in November, the same rate of decrease as in the previous month, which was revised from a 3.1 percent drop reported earlier. The figure was also matched with consensus estimate.
Eurozone private sector activity expanded at a faster than initially estimated pace in December, final data from Markit showed Wednesday. The composite output index rose to 54.3 in December from 54.2 in November. It was above the flash score of 54.
Germany’s private sector expanded at the fastest pace in 17 months in December, final data from Markit showed Wednesday. The composite output index rose to 55.5 in December from 55.2 in November. The flash score was 54.9.
French service providers reported a reduction in activity for the first time in almost a year in December, final data from Markit showed Wednesday. The services Purchasing Managers’ Index fell to 49.8 from 51 in November. The flash score was 50.
French consumer confidence remained unchanged in December, survey results from the statistical office Insee showed Wednesday. The consumer sentiment index came in at 96 in December, the same reading as seen in November. It was forecast to drop to 95.
The buck climbed to over a 7-month high of $1.46 against the pound sterling Wednesday, but has since eased back to around $1.4630.
Although the British service sector expanded at a solid pace in December, underpinned by a sharp rise in new business, the pace of growth eased slightly from November as expectations fell to a near three-year low.
The Purchasing Managers’ Index dropped slightly to 55.5 from 55.9 in November, survey data from Markit and the Chartered Institute of Procurement & Supply revealed Wednesday. The reading was forecast to drop to 55.6.
Shop prices in the United Kingdom continued to decline in December, the British Retail Consortium said on Wednesday, falling 2.0 percent on year. That follows the 2.1 percent decline in November.
The greenback has slipped to around Y118.400 against the Japanese Yen, from a high of Y119.161.
The services sector in Japan continued to expand in December, the latest survey from Nikkei revealed on Wednesday with a PMI score of 51.5. That’s down marginally from 51.6 in November, although it remains well above the boom-or-bust line of 50 that separates expansion from contraction.
The material has been provided by InstaForex Company – www.instaforex.com