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Forex News: Dollar Mixed After ADP Payroll Data

Dollar Mixed After ADP Payroll Data

03/04/2020 - 09:15:00 (RTTNews)

(RTTNews) - The U.S. dollar turned mixed against its major opponents in the European session on Wednesday, after a data showed that U.S. private sector employment grew more than expected in February.

Data from payroll processor ADP showed that U.S. private sector employment climbed by 183,000 jobs in February after jumping by a downwardly revised 209,000 jobs in January.

Economists had expected employment to rise by about 170,000 jobs compared to the spike of 291,000 jobs originally reported for the previous month.

Sentiment improved after the U.S. Federal Reserve announced an emergency rate cut in an extraordinary attempt to contain the coronavirus's economic fallout.

Speculation is rife that the European Central Bank will respond to the Fed's "decisive" interest rate cut with easing of its own.

The dollar rebounded in the previous session as former Vice President Joe Biden's victory in the Democratic primary helped lift market sentiment. Biden won nine primaries including Virginia, North Carolina, and Arkansas in the Democratic race.

The dollar was trading at 0.9574 against the Swiss franc, not far from a session's high of 0.9597 seen at 2:15 am ET. The dollar is seen finding resistance around the 0.98 mark.

The greenback was marginally higher against the yen with the pair trading at 107.56. That followed a 5-month low of 106.85 it had set in the previous session. Next key resistance for the greenback is likely seen around the 110.00 level.

Survey data from IHS Markit showed that Japan's service sector contracted at the strongest rate since April 2014 as that the COVID-19 outbreak had squeezed tourism.

The au Jibun Bank services Purchasing Managers' Index fell to 46.8 in February from 51.0 in January.

The greenback was up against the euro at 1.1126. At yesterday's trading close, the pair was quoted at 1.1169. The greenback is likely to face resistance around the 1.09 region, if it gains again.

Survey data from IHS Markit showed that the euro area private sector growth reached a six-month in February, as initially estimated, despite the outbreak of coronavirus.

The composite output index rose to 51.6 in February from 51.3 in January. A score above 50 indicates expansion.

The greenback fell to 1.2832 against the pound, from a high of 1.2770 seen at 6:00 am ET. The greenback is poised to challenge support around the 1.30 mark.

Final survey data from IHS Markit showed that the UK service sector expanded at a slower pace in February largely due to negative impact on sales from the coronavirus outbreak.

The IHS Markit/Chartered Institute of Procurement & Supply services Purchasing Managers' Index dropped to 53.2 in February from 53.9 in January. The flash score was 53.3.

Looking ahead, at 10:00 am ET, the Bank of Canada announces decision on interest rates. Economists forecast the benchmark rate to be reduced to 1.25 percent from 1.75 percent.

In the New York session, U.S. ISM services PMI for February and Fed's Biege book report are set for release.

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