The U.S. dollar weakened against its major rivals in European deals on Wednesday, after the Federal Reserve Bank of New York President William Dudley warned that the deteriorating outlook about the global growth and the dollar strength would hurt the U.S. economy.
In an interview with MNSI, Dudley told that the Fed would consider persistent tightening of financial conditions very seriously while pursuing its planned interest rate hikes.
In economic front, data released by payroll processor ADP showed that private sector employment jumped by 205,000 jobs in January following an upwardly revised increase of 267,000 jobs in December.
Economists had expected employment to climb by about 190,000 jobs compared to the addition of 257,000 jobs originally reported for the previous month.
The currency showed mixed performance in Asian trading. While the greenback declined against the pound and the yen, it held steady against the euro and the franc.
The greenback declined to a 5-day low of 119.12 against the Japanese yen, compared to 119.96 hit late New York Tuesday. On the downside, 118.00 is possibly seen as the next support level for the greenback.
Survey data from the Cabinet Office showed that Japan’s consumer confidence weakened as expected at the start of the year, although slightly.
The seasonally adjusted consumer confidence index dropped to 42.5 in January, in line with expectations, from 42.7 in December.
The greenback slipped to 1.0129 against the Swiss franc, its weakest since January 28. The pair closed Tuesday’s deals at 1.0178. The greenback is seen finding support around the 1.00 zone.
Extending early decline, the greenback slid to 1.0976 against the euro, a 2-week low. Further weakness may take the greenback to a support around the 1.11 region. At yesterday’s close, the pair was worth 1.0918.
Final survey data from Markit showed that Eurozone composite output index fell to 53.6 in January from 54.3 in December. The reading was slightly above the flash score of 53.5.
The services Purchasing Managers’ Index dropped to 53.6, in line with estimate, from 54.2 in December.
Reversing from a high of 1.4384 hit at 3:10 am ET, the greenback weakened to over a 3-week high of 1.4545 against the pound. The next possible support for the greenback is seen around the 1.48 area. The pound-greenback pair was quoted at 1.4407 when it ended Tuesday’s trading.
Survey figures from Markit Economics showed that the U.K. service sector logged a further solid rate of expansion at the start of the year, underpinned by stronger inflows of new orders.
The Chartered Institute of Procurement & Supply/Markit services Purchasing Managers’ Index rose marginally to 55.6 in January from 55.5 in December. Meanwhile, it was forecast to fall to 55.4.
The greenback moved down to near a 4-week low of 0.6623 against the kiwi and more than a 4-week low of 1.3868 against the loonie, reversing from its early high of 0.6508 and 5-day high of 1.4102, respectively. The greenback is poised to challenge support around 0.68 against the kiwi and 1.37 against the loonie.
The greenback, having advanced to a weekly high of 0.7003 against the aussie at 8:45 pm ET, changed course and fell to 0.7082. If the greenback weakens further, it may find support around the 0.72 zone.
Markit’s final U.S. service sector PMI and ISM non-manufacturing PMI, both for January, and U.S. crude oil inventories data are set to be published shortly.
The material has been provided by InstaForex Company – www.instaforex.com