U.S. Dollar Mixed After ADP Private Payrolls Data
June 03 2020 - 5:51AM
RTTF2
The U.S. dollar showed mixed performance against its major
rivals in the European session on Wednesday, after a data showed
that the nation's private sector hiring declined much less than
forecast in May.
Data from payroll processor ADP showed that the pace of private
sector job losses slowed much more than anticipated in the month of
May.
ADP said private sector employment slumped by 2.76 million jobs
in May after plummeting by a revised 19.557 million jobs in
April.
Economists had expected employment to tumble by about 9.0
million jobs compared to 20.236 million job nosedive originally
reported for the previous month.
Investors await the release of the ISM non-manufacturing PMI and
factory orders at 10:00 am ET.
Weekly jobless claims data is due on Thursday, followed by
nonfarm payrolls report on Friday.
Risk sentiment improved after a survey from Caixin/IHS Markit
showed China's services sector purchasing managers' index jumped to
55.0 in May, the highest since October 2010.
Growing hopes for a global economic recovery after the easing of
lockdown restrictions also supported the market.
The currency showed mixed trading against its key counterparts
in the Asian session. While it dropped against the euro and the
pound, it rose against the yen. Versus the franc, it held
steady.
The greenback recovered to 1.2554 against the pound, from a low
of 1.2612 set in early deals, which was its lowest level since
April 30. The greenback is seen finding resistance around the 1.22
mark.
Data from IHS Markit showed that the UK service providers
reported a steep reduction in business activity in May due to a
fall in business and consumer spending amid the coronavirus, or
Covid-19, pandemic.
The final IHS Markit/Chartered Institute of Procurement &
Supply services Purchasing Managers' Index advanced to 29.0 in May
from 13.4 in the previous month. This was above the flash estimate
of 27.8.
The greenback was trading at 1.1207 against the euro, slightly
up from a 2-1/2-month low of 1.1228 logged at 3:15 am ET. The pair
had closed Tuesday's deals at 1.1169.
Survey results from IHS Markit showed that the euro area private
sector contracted sharply in May, but improved from April as
lockdown restrictions implemented to prevent the spread of
coronavirus loosened in many economies.
The final composite output index rose to 31.9 in May from
April's record low of 13.6. The score was above the flash reading
of 30.5.
The greenback remained higher at a 5-day high of 0.9648 versus
the franc. At Tuesday's close, the pair was valued at 0.9622. Next
key resistance for the greenback is likely seen around the 0.98
level.
After climbing to a 2-month high of 108.85 in the previous
session, the greenback wobbled versus the yen during the European
trading session. The pair was trading near Tuesday's closing value
of 108.66.
Looking ahead, at 10:00 am ET, the Bank of Canada announces
decision on interest rates. Economists forecast the benchmark rate
to remain at 0.25 percent.
In the New York session, U.S. ISM services PMI for May and
factory orders for April are set for release.
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