U.S. Dollar Slides On Weak ADP Data, Trade Worries
September 06 2018 - 5:52AM
RTTF2
The U.S. dollar drifted lower against its key counterparts in
the European session on Thursday, as the nation's private sector
employment grew less than expected in August, while concerns that
the Trump administration would impose new tariffs on Chinese goods
after the end of a public comment period also dampened
sentiment.
Data from the payroll processor ADP showed that U.S. private
sector employment climbed by 163,000 jobs in August after jumping
by a revised 217,000 jobs in July.
Economists had expected an increase of about 190,000 jobs
compared to the spike of 219,000 jobs originally reported for the
previous month.
U.S. President Donald Trump is set to impose tariffs on another
$200 billion of Chinese imports as soon as a public comment period
ends later in the day.
If the U.S. goes ahead with the tariffs, China is likely to
retaliate in a tit-for-tat trade war.
Meanwhile, Canada's Foreign Minister Chrystia Freeland said that
the U.S. and Canada are making "good progress" on the revision of
the North American trade pact but talks will continue to resolve
remaining issues.
The currency dropped against its major counterparts in the Asian
session.
The greenback weakened to 1.2960 against the pound from
yesterday's closing value of 1.2904. If the greenback falls
further, it may find support around the 1.32 level.
The greenback fell back to 1.1655 against the euro, just few
pips short of a 6-day low of 1.1659 seen at 8:15 pm ET. The
greenback is likely to challenge support around the 1.18 level.
Data from Destatis showed that Germany's factory orders dropped
unexpectedly on foreign demand in July.
New orders in manufacturing fell 0.9 percent in July from June,
confounding expectations for an increase of 1.8 percent.
Nonetheless, this was slower than the 3.9 percent decline seen in
June.
The greenback slipped to a 2-day low of 111.12 against the yen
and a 6-day low of 0.9677 against the franc, off its early highs of
111.53 and 0.9719, respectively. On the downside, 110.00 and 0.95
are possibly seen as the next support levels for the greenback
against the yen and the franc, respectively.
The greenback pared gains to 0.7208 against the aussie, from a
high of 0.7166 hit at 1:30 am ET. The greenback is poised to find
support around the 0.74 level.
The greenback retreated to 0.6606 against the kiwi, following a
high of 0.6572 seen at 2:30 am ET. This may be compared to a 3-day
low of 0.6616 set in the Asian session. Next key support for the
greenback may be seen around the 0.68 region.
On the flip side, the greenback was moderately higher against
the loonie with the pair trading at 1.3188. This follows a low of
1.3164 seen at 8:15 pm ET. The greenback is seen finding resistance
around the 1.35 region.
The U.S. factory orders for July and ISM non-manufacturing
composite index for August are set for release shortly.
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