The U.S. dollar strengthened against its major rivals on Wednesday, buoyed by data showing a bigger than expected increase in the nation’s private sector job growth in June.
With the strong job growth signaling a recovery in the labor market and raising speculation about an early tapering of the central bank’s quantitative easing program, the dollar had a pretty good outing today.
Data from Automatic Data Processing, Inc. (ADP) showed private business in the U.S. hired 692,000 workers in the month of June, higher than an expected addition of 600,000. However, the hiring in June was much below a downwardly revised 886,000 job additions in May.
According to a report released by the Institute for Supply Management (ISM), the MNI Chicago Business Barometer came in with a reading of 66.1 for June, down from a score of 75.2 in the previous month.
Data released by the National Association of Realtors (NAR) showed pending home sales in the U.S. increased by 13.1% year-on-year in May, after soaring by a record 51.7% in April.
The dollar index, which climbed to 92.45, retreated a bit from that level and was last seen at 92.36, up 0.34% from the previous close.
Against the Euro, the dollar strengthened to 1.1862, gaining more than 0.3%. The euro area inflation came in at 1.9% in June, as expected, down from 2% in the previous month, according to preliminary data from Eurostat. The inflation rate had exceeded the European Central Bank’s target of “below, but close to” 2% in May.
The Pound Sterling recovered lost ground, after falling a bit in the U.S. session. The sterling was fetching $1.3835 a little while ago, compared to $1.3838 on Tuesday. Revised data from the Office for National Statistics revealed that U.K.’s first-quarter gross domestic product dropped 1.6% sequentially instead of 1.5% fall estimated previously. GDP was up 1.3% in the fourth quarter of 2020.
The dollar firmed against the Yen, gaining more than 0.5% at 111.11 yen a unit.
Against the Aussie, the dollar strengthened to 0.7500 from 0.7512.
The Swiss franc weakened to 0.9251 a dollar, easing from 0.9210. The Swiss Economic Barometer unexpectedly dropped to 133.4 in June from 143.7 in May, which was revised from 143.2, survey results from the Z?rich-based think tank KOF showed.
Against the Loonie, the dollar traded at C$ 1.2396, down slightly from $1.2401. Data released by Statistics Canada showed the Canadian economy contracted 0.3% month-over-month in April of 2021, ending 11 consecutive monthly increases. Economists had forecast a contraction of 0.8%.
The material has been provided by InstaForex Company – www.instaforex.com