Dollar Continues To Exhibit Weakness
The U.S. dollar retreated after moving higher early on in the session on Wednesday, as rising possibilities of a fiscal stimulus in the U.S., and fairly encouraging economic data from Asia and Europe dimmed its safe haven appeal.
Data showing a smaller than expected increase in U.S. private sector employment in the month of November contributed as well to the currency’s weakness.
According to the report from payroll processor ADP, private sector employment in the U.S. increased by less than expected in the month of November. The report said private sector employment rose by 307,000 jobs in November after climbing by an upwardly revised 404,000 jobs in October.
Economists had expected employment to increase by 410,000 jobs compared to the addition of 365,000 jobs originally reported for the previous month.
The dollar index, which advanced to 91.50 in the European session, dropped to 90.99 later on in the day, losing about 0.34% from previous close.
Against the Euro, the dollar was down nearly 0.4% at $1.2117. Eurozone producer prices continued to fall in October on weak energy prices, another data from Eurostat showed.
Producer prices decreased 2% year-on-year in October but slower than the 2.3% fall in September. This was also slower than the 2.4% decrease economists’ had forecast.
The Pound Sterling was weaker against the dollar, fetching $1.3371 a unit of Sterling, down from $1.3420 on Tuesday.’
The Yen was weak at 104.42 a dollar, despite recovering from a low of 104.76.
The AUD-USD pair was at 0.7417, with the Aussie gaining more than 0.6%. Australia’s gross domestic product climbed a seasonally adjusted 3.3% on quarter in the third quarter of 2020, the Australian Bureau of Statistics said. That beat expectations for a gain of 2.6 percent following the 7.0 percent drop in the second quarter.
The Swiss franc was at 0.8947 a dollar, recovering from 0.8997 a dollar. Switzerland’s consumer prices continued to decline in November, data from the Federal Statistical Office showed.
The consumer price index decreased 0.7% year-on-year in November, following a 0.6% fall in October. Economists had expected a 0.5% fall. On a monthly basis, consumer prices fell 0.2% in November. Economists had forecast a fall of 0.1%.
The Loonie firmed up to 1.2910 a dollar from 1.2936, thanks to higher crude oil prices.