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Forex - Dollar remains lower despite strong ADP number

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Investing.com -

Investing.com - The dollar remained broadly lower on Wednesday, despite better-than-expected data on U.S. private sector hiring as investors remained wary in the wake of recent declines in oil and a steep drop on Wall Street.

The dollar was lower against the yen, which tends to be bought by investors in times of risk aversion, with USD/JPY down 0.61% at 119.22.

The dollar shrugged off a report by payrolls processor ADP showing that the U.S. private sector added 205,000 jobs last month, beating economists' forecasts for an increase of 195,000.

Markets use the ADP data as a guide for the Labor Department's employment report, which will be released Friday and covers both government and private sector jobs growth.

Economists expect Friday's report to show that the U.S. economy created 190,000 jobs last month, after an increase of 292,000 in December.

The U.S. was to release data on service sector activity later in the day.

Oil prices rose on Wednesday after ending the previous session sharply lower amid fears that a massive supply glut is coinciding with slowing global demand.

But investors remained risk adverse in the wake of the steep declines in oil prices and falls in global equities amid worries over a slowdown in global economic growth.

The low-yielding euro was higher against the dollar, with EUR/USD rising 0.44% to 1.0966. The Swiss franc was also higher, with USD/CHF down 0.44% to 1.0143.

In the euro zone, data on Wednesday showed that business activity slowed to a four month low in January, adding to pressure on the European Central Bank to take fresh measures to shore up growth.

The composite euro area PMI, which measures manufacturing and service sector activity, slid to 53.6 in January from 54.3 in December.

Sterling was at three week highs against the dollar boosted by data showing that the dominant U.K. service sector posted another solid rise in output in January, getting 2016 off to a strong start.

GBP/USD touched highs of 1.4544, the most since January 12.

The currencies of commodity producing countries were boosted by the rise in oil prices.

AUD/USD was up 0.57% to 0.7077, recovering after steep falls in the previous session, while USD/CAD was down 1.21% to one-month lows of 1.3885.

The New Zealand dollar jumped after better-than-expected labor market data was seen as pushing back the chances for a rate cut by the country's central bank.

NZD/USD advanced 1.59% to 0.6615, off overnight lows of 0.6508.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was down 0.55% at 98.32.

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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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