The U.S. dollar firmed against its major rivals in European deals on Wednesday, after ADP private sector jobs growth accelerated in February, cementing expectations for further Fed rate hike this year.
Data from payroll processor ADP showed that U.S. private sector employment increased much more-than-expected in the month of February.
ADP said private sector employment jumped by 214,000 jobs in February following an increase of 193,000 jobs in January. Economists had expected employment to rise by about 185,000 jobs.
The ADP data is a key gauge to Friday’s non-farm payrolls report, which could shed more insights about labor market.
Worries about U.S. recession receded after recent string of solid US economic data. Data showed on Tuesday that the construction spending unexpectedly jumped 1.5% to the highest level since 2007 in January, while the February ISM manufacturing Index was not as weak as expected, bolstering the outlook about the U.S. economic growth.
The greenback showed mixed performance in Asian trading. While the greenback climbed against the yen, franc and the euro, it declined against the pound.
In European deals, the greenback bounced off from an early 2-day low of 0.9955 against the franc, rising to 1.0003. The greenback is seen finding resistance around the 1.01 zone.
Figures from the State Secretariat for Economic Affairs showed that the Swiss economy expanded in the fourth quarter on spending.
Gross domestic product advanced 0.4 percent sequentially, reversing the 0.1 percent contraction in the third quarter. The growth rate was also faster than the 0.2 percent expected expansion.
The greenback strengthened to 114.55 against the Japanese yen, its highest since February 16. On the upside, 116.00 is likely seen as the next resistance level for the greenback.
The greenback edged up to 1.0840 against the euro, following a decline to 1.0881 at 7:00 pm ET. If the greenback extends rise, it may locate resistance around the 1.07 mark.
Figures from the Eurostat showed that Eurozone producer prices fell at the slowest pace in five months during January, in line with economists’ expectations.
The industrial producer price index decreased 2.9 percent year-on-year following a 3 percent slump in December.
The greenback rallied to 1.3490 against the loonie, after falling to 1.3403 at 5:00 pm ET. The greenback is poised to test resistance around the 1.36 region.
On the flip side, the greenback declined to 5-day low of 1.4043 against the pound, off its early high of 1.3914. The next possible support for the greenback is seen around the 1.42 mark.
Data from Markit Economics and the Chartered Institute of Procurement & Supply showed that British construction activity expanded at the weakest pace in ten months in February, defying economists’ expectations for a modest improvement.
The Markit/CIPS UK Construction Purchasing Managers’ Index fell to 54.2 in February from 55.0 in the previous month.
At 10:00 am ET, Federal Reserve Bank of San Francisco President John Williams is expected to speak on the economic outlook before the Bishop Ranch Forum in California.
Subsequently, European Central Bank board member Benoit Coeure will speak to the European Parliament in Brussels.
At 2:00 pm ET, Federal Reserve will issue the Beige Book of economic condition in Washington D.C.
The material has been provided by InstaForex Company – www.instaforex.com