Dollar Outperforms As U.S. Private Sector Hiring Beats Forecasts
05 Febrero 2020 - 03:58AM
RTTF2
The U.S. dollar spiked up against its major counterparts in the
European session on Wednesday, as ADP data showed much stronger
than expected private sector job growth in January, supporting
hopes that the Fed will hold policy steady in the coming
months.
Data from payroll processor ADP showed that private sector
employment soared by 291,000 jobs in January after jumping by a
revised 199,000 jobs in December.
Economists had expected employment to increase by about 156,000
jobs compared to the addition of 202,000 jobs originally reported
for the previous month.
The ADP data serves as a precursor to the U.S. nonfarm payrolls
data, which will be released on Friday.
The report is expected to show employment climbed by about
161,000 jobs in January after jumping by 145,000 jobs in
December.
The jobless rate is expected to hold at 3.5 percent.
In economic releases, data from the Commerce Department showed
that the U.S. trade deficit widened in the month of December.
The Commerce Department said the trade deficit widened to $48.9
billion in December from a revised $43.7 billion in November.
The greenback showed mixed performance in the Asian session.
While it held steady against the franc and the euro, it fell
against the yen. Versus the pound, it rose.
The greenback advanced to a 6-day high of 0.9737 against the
franc and near a 2-week high of 109.81 versus the yen, from its
early lows of 0.9678 and 109.30, respectively. On the upside, 0.99
and 111.00 are possibly seen as the next resistance for the
greenback against the franc and the yen, respectively.
The greenback rose to 1.1008 against the euro, its biggest since
January 30. If the greenback rises further, 1.09 is seen as its
next resistance level.
Data from Eurostat showed that Eurozone retail sales declined
more than expected in December on weak food and non-food product
sales.
Retail turnover declined 1.6 percent in December from November,
when it was up 0.8 percent. Economists had forecast a 1.1 percent
drop.
After falling to a 2-day low of 1.3070 at 4:30 am ET, the
greenback appreciated to 1.2992 against the pound after the data.
The next possible resistance for the greenback is seen around the
1.27 mark.
Survey results from IHS Markit and Chartered Institute of
Procurement & Supply showed that the UK service sector
rebounded at a faster-than-estimated pace in January driven by
rising client demand after general election.
The services Purchasing Managers' Index rose to 53.9 in January
from 50.0 in December. The reading exceeded the flash estimate of
52.9.
The greenback bounced off to 0.6477 against the kiwi, from a
6-day low of 0.6503 seen at 4:15 am ET. Against the loonie, the
greenback recovered to 1.3290, from an early 2-day low of 1.3263.
The greenback is likely to target resistance around 0.63 against
the kiwi and 1.35 against the loonie.
In contrast, the greenback held steady against the aussie, after
dropping to a weekly low of 0.6774 at 4:30 am ET. The pair was
worth 0.6739 at yesterday's close.
The ISM non-manufacturing composite index and Markit's U.S.
final services PMI for January are set for release shortly.
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