Dollar Falls As U.S. Private Sector Hiring Slows Sharply
December 04 2019 - 4:38AM
RTTF2
The U.S. dollar drifted lower against its major counterparts in
the European session on Wednesday, as private sector jobs rose much
less than forecast in November, adding to worries about a slowdown
in U.S. economy.
Data from payroll processor ADP showed that private sector
employment increased by much less than anticipated in the month of
November.
ADP said private sector employment rose by 67,000 jobs in
November after climbing by a revised 121,000 jobs in October.
Economists had expected employment to jump by 140,000 jobs
compared to the addition of 125,000 jobs originally reported for
the previous month.
The data is seen as a precursor to the monthly non-farm payrolls
report due out on Friday.
Economists expect the economy to have added 180,000 jobs in
November, up from 128,000 jobs in October. The unemployment rate is
expected to hold steady at 3.6 percent.
The Institute for Supply management's non-manufacturing PMI will
be released at 10 am ET. The index is seen at 54.5 versus 54.7 in
October.
At the same time, Federal Reserve Vice Chairman for Supervision
Randal Quarles will speak about supervision and regulation before
the House Financial Services Committee in Washington.
The currency held steady against its key counterparts in the
previous session, except the yen.
The greenback depreciated to near a 2-week low of 1.1095 against
the euro, from a high of 1.1067 recorded at 4:15 am ET. At
yesterday's trading close, the pair was quoted at 1.1081. Extension
of the greenback's downtrend may lead it to a support around the
1.12 region.
Final survey data from IHS Markit showed that the euro area
private sector growth remained the lowest in six-and-a-half years
in November, signaling modest expansion for the fourth quarter.
The composite output index held steady at 50.6 in November. The
reading was slightly above the flash estimate of 50.3.
Extending its early decline, the greenback slid to 1.3105
against the pound, its lowest level since May 6. The pair was worth
1.2994 at Tuesday's close. The greenback may challenge support
around the 1.34 mark.
Survey results from IHS Markit and Chartered Institute of
Procurement & Supply showed that the UK service sector
contracted the most in eight months in November but the pace of
decline was slower than initially estimated.
The final services Purchasing Managers' Index fell to 49.3 in
November from 50.0 in October. Although the reading was above the
flash reading of 48.6, the index signaled the steepest drop since
March.
The greenback pulled back to 0.9872 against the franc, not far
from over a 4-week low of 0.9855 seen at 3:30 am ET. Should the
greenback falls further, it is likely to test support around the
0.96 region.
The greenback eased off to 108.56 against the Japanese currency,
heading towards nearly a 2-week low of 108.43 it recorded at 2:30
am ET. The greenback is seen facing support around the 106.00
mark.
The latest survey from Jibun Bank showed that Japan services
sector moved back into expansion in November, albeit barely, with a
PMI score of 50.3.
That's up from 49.8 and it moves back above the boom-or-bust
line of 50 that separates expansion from contraction.
Following an advance to 0.6503 against the kiwi at 4:30 am ET,
the greenback turned lower, touching a 4-month low of 0.6536. The
greenback was trading at 0.6519 per kiwi at yesterday's close.
Further downward trading may take the greenback to a support around
the 0.68 area.
The USD/CAD pair logged a weekly low of 1.3266, compared to
Tuesday's closing quote of 1.3295. The greenback is likely to face
support around the 1.30 region, if it falls again.
After rising to a 2-day high of 0.6813 at 3:00 am ET, the
greenback retraced its gains against the aussie, with the pair
trading at 0.6846. The greenback is poised to test support around
the 0.71 mark.
Looking ahead, the Bank of Canada's interest rate decision is
scheduled for release at 10:00 am ET. Economists expect the
benchmark rate to be kept unchanged at 1.75 percent.
Simultaneously, U.S. ISM services PMI for November will be
featured.
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