Dollar Muted After ADP Private Payrolls Data
The U.S. dollar showed muted trading against its major counterparts in the European trading session on Wednesday, after the release of ADP data showing strong private sector job growth in the month of March.
Data from payroll processor ADP showed that private sector employment surged up by 517,000 jobs in March after climbing by an upwardly revised 176,000 jobs in February.
Economists had expected employment to jump by 550,000 jobs compared to the addition of 117,000 jobs originally reported for the previous month.
On Friday, the Labor Department is scheduled to release its more closely watched monthly jobs report, which includes both public and private sector jobs.
Investors awaited President Joe Biden’s infrastructure plan worth around $2.25 trillion set to be unveiled later in the day.
The plan will fund road and bridge projects and boost investments in climate infrastructure and research and development.
The plan will be funded by tax hikes, including an increase of the corporate tax rate to 28 percent from 21 percent.
The greenback was higher in the Asian session on the back of rising U.S. treasury yields.
The greenback recovered to 1.1721 against the euro, from a low of 1.1748 hit at 4:30 am ET. The greenback is on course to pierce a multi-month high of 1.1704 seen in the Asian session. If the greenback rises further, 1.14 is likely seen as its next resistance level.
Flash data from Eurostat showed that Eurozone consumer prices increased at a faster pace in March.
Inflation advanced to 1.3 percent in March, in line with expectations, from 0.9 percent in February. This was the third consecutive rise in prices.
The greenback rose back to 0.9443 against the franc, not far from the Asian session’s peak of 0.9447, which was its biggest level since July 2020. At yesterday’s trading close, the pair was quoted at 0.9420. On the upside, 0.96 is possibly seen as its next resistance level.
The greenback remained higher against the yen, with the pair worth 110.80. This may be compared to more than a 1-year high of 110.96 set at 11:00 pm ET. The pair had closed Tuesday’s deals at 110.35. The next likely resistance for the greenback is seen around the 112.00 region.
Data from the Ministry of Land, Infrastructure, Transport and Tourism showed that Japan housing starts continued to decline in February.
Housing starts decreased 3.7 percent year-on-year in February, bigger than the 3.1 percent fall in January and 4.8 percent decline expected by economists.
The U.S. currency staged a modest recovery to 1.3754 against the pound, following a 2-day low of 1.3794 logged at 5:30 am ET. The pound-greenback pair had ended yesterday’s trading session at 1.3740. The greenback is likely to test resistance around the 1.34 region.
Data from the Office for National Statistics showed that the UK economy grew more than previously estimated in the fourth quarter but the overall contraction for the whole year of 2020 was the biggest on record.
Gross domestic product grew 1.3 percent sequentially in the fourth quarter instead of +1 percent estimated initially. The economy had expanded sharply by 16.9 percent in the third quarter.
U.S. pending home sales for February are due out at 10:00 am ET.