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Dollar broadly higher vs. rivals ahead of U.S. data

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Investing.com - The dollar was broadly higher against the other major currencies on Wednesday, as investors eyed the release of U.S. economic reports later in the day, amid growing expectations for the Federal Reserve to soon begin tapering its stimulus program.

During European morning trade, USD/JPY eased up 0.05% to 102.57.

The dollar remained supported after the Institute for Supply Management said Monday that manufacturing activity in the U.S. expanded at the fastest rate since April 2011 in November, fuelling optimism over the economic recovery.

Meanwhile, expectations that the Bank of Japan will have to expand its stimulus program in order to meet its target of 2% inflation by 2015 continued to pressure the yen lower.

Earlier in the week, BoJ Governor Haruhiko Kuroda pledged to counter any new downside risks to the bank's inflation goal, saying the BoJ would act by "adjusting monetary policy without hesitation."

Elsewhere, EUR/USD was down 0.01% to 1.3588.

In the euro zone, official data showed that retail sales fell 0.2% in October, confounding expectations for a 0.3% rise, after a 0.6% decline the previous month.

The report came after Markit said that the bloc's final services purchasing managers' index inched up to 51.2 in November, up from a preliminary reading of 50.9 and compared to 51.6 in October.

Germany's services PMI rose to 55.7 in November, up from a preliminary reading of 54.5 and compared to 52.9 in October.

The pound edged lower against the dollar, with GBP/USD down 0.19% to 1.6360.

Earlier in the day, Markit said the seasonally adjusted Markit/CIPS Services PMI fell to 60.0 in November from a reading of 62.5 in October, which was the strongest since May 1997.

Analysts had expected the index to decline to 62.0 last month.

The dollar was little changed against the Swiss franc, with USD/CHF easing 0.02% to 0.9043.

The greenback was broadly higher against the Australian, New Zealand and Canadian dollars, with AUD/USD tumbled 1.31% to 0.9016, NZD/USD declining 0.67% to 0.8186 and USD/CAD adding 0.21% to 1.0672.

The Aussie came under pressure after official data showed that Australia's gross domestic product rose 0.6% in the third quarter, less than the expected 0.8% expansion, after an upwardly revised 0.7% rise in the three months to June.

On a yearly basis, Australia's economy grew 2.3%, compared to expectations for a 2.6% expansion.

The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.07% to 80.69.

Later in the day, the U.S. was to release the ADP report on private sector job creation, as well as data on new home sales and the trade balance. In addition, the Institute of Supply Management was to release its services PMI.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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