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Dollar mostly higher vs. rivals on ISM report, ECB ahead

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Investing.com -

Investing.com - The dollar was mostly higher against the other major currencies on Wednesday, as an upbeat U.S. service sector report lent some support to the greenback, while caution ahead of the European Central Bank's policy meeting continued to support safe-haven demand.

The dollar was higher against the euro, with EUR/USD down 0.08% to 1.3617.

the Institute of Supply Management said its non-manufacturing index rose to a nine-month high of 56.3 in May, from a reading of 55.2 the previous month, compared to expectations for a rise to 55.5.

The data came after payroll processing firm ADP said non-farm private employment rose by 179,000 in May, below expectations for an increase of 210,000. April's figure was revised down to a gain of 215,000 from a previously reported increase of 220,000.

A separate report showed that U.S. trade deficit widened to $47.24 billion in April, from $44.18 billion in March whose figure was revised from a previously estimated deficit of $40.40 billion. Analysts had expected the trade deficit to widen to $40.80billion in April.

The euro came under pressure earlier, after Markit earlier said that Germany's services purchasing managers' index fell to 56.0 in May from 56.4 in April, confounding expectations for the index to remain unchanged.

Separately, Spain's services PMI fell to 55.7 in May, from a reading of 56.5 the previous month, while Italy's services PMI rose to 51.6 last month, from 51.1 in April.

The pound was steady against the dollar, with GBP/USD easing 0.01% to 1.6749.

Sterling strengthened mildly after Markit said the U.K. services PMI slipped to 58.6 last month, from a reading of 58.7 in April, compared to expectations for a fall to 58.2.

The dollar was higher against the yen, with USD/JPY edging up 0.15% to 102.66 and little changed against the Swiss franc, with USD/CHF dipping 0.04% to 0.8960.

The greenback was steady to higher against the Australian, New Zealand and Canadian dollars, with AUD/USD up 0.05% to 0.9271, NZD/USD easing 0.09% to 0.8424 and USD/CAD gaining 0.28% to 1.0939.

In a widely expected move, the Bank of Canada held its benchma rk interest rate at 1%, saying that "the balance of risks remains within the zone for which the current stance of monetary policy is appropriate."

Earlier Wednesday, official data showed that the trade balance swung into a deficit of C$0.64 billion in April, from a surplus of C$0.77 billion in March whose figure was revised from a previously estimated surplus of C$0.08 billion. Analysts had expected the trade surplus to narrow to C$0.10 billion in April.

The Aussie found support after official data earlier showed that Australia's gross domestic product expanded at a rate of 1.1% in the first quarter, after 0.8% growth in the three months to December, compared to expectations for an expansion of 0.9%.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.09% to 80.64.

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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.


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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