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Forex News: Dollar Lower As ADP Data Misses Forecast

Dollar Lower As ADP Data Misses Forecast

07/03/2019 - 09:37:00 (RTTNews)

(RTTNews) - The U.S. dollar was trading in a negative territory against its major opponents in the European session on Wednesday, as U.S. private sector employment grew less than forecast in June, adding to hopes for a potential rate cut by the Federal Reserve.

ADP said private sector employment climbed by 102,000 jobs in June after rising by an upwardly revised 41,000 jobs in May.

Economists had expected employment to increase by about 140,000 jobs compared to the addition of 27,000 jobs originally reported for the previous month.

The ADP data serves a precursor to much anticipated nonfarm payrolls data, which will be released on Friday.

The report is expected to show employment climbed by about 164,000 jobs in June following a 75,000 gain in May. The unemployment rate is expected to hold at 3.6 percent.

The Institute for Supply Management's non-manufacturing index for June and factory orders for May will be featured shortly.

In other economic releases, data from the Commerce Department showed that the U.S. trade deficit widened more than anticipated in the month of May, as the value of imports jumped by much more than the value of exports.

The Commerce Department said the trade deficit widened to $55.5 billion in May from a revised $51.2 billion in April.

Data from the Labor Department showed a modest decrease in first-time claims for U.S. unemployment benefits in the week ended June 29th.

The Labor Department said initial jobless claims dipped to 221,000, a decrease of 8,000 from the previous week's revised level of 229,000.

The greenback performed in a mixed manner against its key counterparts in the Asian session. While it dropped against the franc and the yen, it was steady against the euro. Against the pound, it rose.

The greenback fell back to 0.9837 against the franc, heading to pierce a 2-day low of 0.9835 hit at 9:00 pm ET. The greenback is seen finding support around the 0.96 level.

The greenback touched the key 1.13 level against the euro, down from near a 2-week high of 1.1269 seen at 3:15 am ET. The greenback is poised to find support around the 1.15 mark.

Survey data from IHS Markit showed that the euro area private sector expanded at a faster than initially estimated pace in June reflecting a pick-up in economic growth in the currency bloc.

The final composite output index rose to 52.2 in June from 51.8 in May. The initial score was 52.1.

The greenback briefly fell to 107.58 against the yen after the data, not far from a weekly low of 107.53 touched at 9:30 pm ET. The greenback is likely test support around the 106.00 area.

Survey data from IHS Markit showed that Japan's services sector maintained its growth trend in June driven by output and improved demand.

The Jibun Bank Japan Services Purchasing Managers' Index rose to 51.9 in June from 51.7 in May. The sector has extended its upward trend into a thirty-third month.

Following a 2-week high of 1.2557 set at 3:00 am ET, the greenback reversed direction versus the pound, retreating to 1.2592. On the downside, 1.27 is possibly seen as the next support level for the greenback.

Data from IHS Markit showed that UK service sector activity moved close to stagnation in June.

The IHS Markit/ Chartered Institute of Procurement & Supply services Purchasing Managers' Index fell to 50.2 in June from 51.0 in May. This was the lowest reading for three months.

The greenback that ended Tuesday's trading at 1.3106 against the loonie slipped to a 2-day low of 1.3085. If the greenback falls further, it may find support around the 1.32 level.

The greenback remained lower at a 2-day low of 0.7024 against the aussie, compared to yesterday's closing value of 0.6994. The next possible support for the greenback is seen around the 0.715 level.

Data from the Australian Bureau of Statistics showed that Australia's trade surplus increased more than expected in May on higher exports.

The trade surplus rose to a seasonally adjusted A$5.74 billion in May from A$4.82 billion in April. Economists had forecast the surplus to rise to A$5.25 billion.

Extending early fall, the greenback weakened to a 2-day low of 0.6693 versus the NZ currency. At yesterday's close, the pair was worth 0.6671. Further downward trading may see the greenback challenging support around the 0.68 area.

The U.S. factory orders for May and ISM non-manufacturing composite index for June will be published at 10:00 am ET.

For comments and feedback: contact editorial@rttnews.com

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