The U.S. dollar drifted higher against its major rivals in European deals on Thursday, as the U.S. private sector employment increased more than expected in December, in the latest sign that U.S. labor market gathered momentum despite indications of slowdown around the world.
Data from the payroll processor ADP showed that 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.
In another sign of strengthening economy, data from the Commerce Department showed that the U.S. trade deficit narrowed in November.
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.
Markets await the Federal Reserve minutes of the December 15-16 meeting later in the day, for further insights into the bank’s plan for future rate hikes. At its December meeting, the Fed raised its federal funds rate by 0.25 – 0.50 percent.
Friday’s jobs data is forecast to show that the US economy added 200,000 jobs in December. Unemployment rate is expected to remain at a seven-year low of 5 percent.
The currency was higher on Tuesday, as worries over global growth spurred demand for safe-haven assets. It added 0.26 percent against the pound, 0.73 percent against the euro and 0.67 percent against the franc for the day.
The greenback showed mixed performance in Asian trading. While the greenback rose against the franc and the pound, it held steady against the euro. Against the yen, it declined.
Bouncing off from an early nearly 3-month low of 118.25 against the yen, the greenback rose back to 118.59. The next possible resistance for the greenback-yen pair is seen around the 119.5 zone.
Survey from Nikkei showed that Japan’s services sector remained in expansion in December 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 greenback that ended Tuesday’s trading at 1.0085 against the Swiss franc edged up to 1.0119. The greenback is seen finding resistance around the 1.025 region.
Extending early rally, the greenback spiked up to 1.4600 against the pound, a level not seen since April 13, 2015. At yesterday’s close, the pair was worth 1.4673. Continuation of the greenback’s uptrend is likely to find resistance around the 1.45 area.
Survey data from Markit and Chartered Institute of Procurement & Supply showed that the British service sector growth stabilized at a solid pace in December supported by sharp rise in new business.
The Purchasing Managers’ Index fell slightly to 55.5 in December from 55.9 in November. Nonetheless, it remained above the long-run survey trend of 55.2.
The greenback climbed to 1.0714 against the euro, following a low of 1.0773 hit at 8:15 pm ET. The greenback ended Tuesday’s trading at 1.0747 per euro. If the greenback extends rise, 1.05 is possibly seen as its next resistance level.
Final data from Markit showed that Eurozone private sector activity expanded at a faster than initially estimated pace in December.
The composite output index rose to 54.3 in December from 54.2 in November. It was above the flash score of 54.
The greenback rallied to 1.4108 against the Canadian dollar for the first time since August 2003. On the upside, the greenback may locate resistance around the 1.425 region. At yesterday’s close, the pair was worth 1.3996.
The greenback firmed to near a 2-month high of 0.7055 against the aussie, compared to 0.7158 hit late New York Tuesday. The greenback is poised to target resistance around the 0.69 mark.
The greenback held steady against the NZ dollar, trading at 0.6637, after approaching a 4-week high of 0.6626 in European deals. The pair was worth 0.6702 when it ended Tuesday’s deals.
The U.S. factory orders data for November, Markit’s U.S. service sector PMI report for December, the Institute for Supply Management’s U.S. non-manufacturing PMI for December and U.S. crude oil inventories data are slated for release shortly.
The material has been provided by InstaForex Company – www.instaforex.com