U.S. Dollar Lower Amid Soft ADP Data, Trade War Worries
July 05 2018 - 06:16AM
RTTF2
The U.S. dollar was lower against its most major opponents in
the European session on Thursday, as a data showed that U.S.
private sector employment grew less than expected in June, while a
looming deadline for Washington's implementation of tariffs on
China kept investors cautious.
Data from payroll processor ADP showed that private sector
employment climbed by 177,000 jobs in June after jumping by an
upwardly revised 189,000 jobs in May.
Economists had expected employment to rise by about 190,000 jobs
compared to the addition of 178,000 jobs originally reported for
the previous month.
Data from the Labor Department showed a modest uptick in
first-time claims for U.S. unemployment benefits in the week ended
June 30.
The report said initial jobless claims inched up to 231,000, an
increase of 3,000 from the previous week's revised level of
228,000. Economists had expected jobless claims to edge down to
225,000.
Trade worries continued, as the U.S. is scheduled to impose
tariffs on $34 billion worth of goods from China on Friday. Beijing
pledged to fight back with its own $34 billion of tariffs on U.S.
goods, escalating conflict.
Investors await minutes from the June 12-13 policy meeting due
at 2:00 pm ET for outlook on monetary policy and inflation.
All-important nonfarm payrolls data is due on Friday, with
economists expecting an addition of 195,000 jobs in June. The
unemployment rate is expected to be steady at the 18-year low of
3.8 percent.
The currency traded mixed against its major rivals in the Asian
session. While it rose against the franc and the yen, it fell
against the euro. Against the pound, it held steady.
The greenback fell to 9-day lows of 1.3275 against the pound and
1.1720 against the euro, off its early highs of 1.3210 and 1.1650,
respectively. The greenback is likely to challenge support around
1.34 against the pound and 1.185 against the euro.
The greenback eased back to 0.9911 against the franc, from a
high of 0.9940 hit at 1:00 am ET. The greenback is likely to find
support around the 0.98 level.
Data from the Federal Statistical Office showed that
Switzerland's inflation continued to rise in June.
Inflation rose to 1.1 percent in June from 1 percent in May. The
rate came in line with expectations.
The greenback held steady against the yen, after having advanced
to a 2-day high of 110.71 at 5:50 am ET. At yesterday's close, the
pair was worth 110.48.
The greenback edged down to 1.3115 against the loonie and 0.7408
against the aussie, from its early high of 1.3160 and a 2-day high
of 0.7361, respectively. The next likely downside target for the
greenback is seen around 1.30 against the loonie and 0.75 against
the aussie.
The greenback slipped to a weekly low of 0.6798 against the
kiwi, following a high of 0.6751 seen at 9:00 pm ET. On the
downside, 0.69 is possibly seen as the next support level for the
greenback.
At 2:00 pm ET, the Federal Reserve releases minutes from the
June 12-13 meeting.
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