US Dollar Extends Gain As Solid ADP Jobs Data Boosts Economic Outlook
Canbera (July 2) The US dollar continued its uptrend against the other major currencies in European deals on Wednesday after data showed that US private sector employment increased much more than anticipated in June, reflecting optimism concerning growth in nation's labor market.
According to a report released by payroll processor ADP, the US private sector employment surged up by 281,000 jobs in June following an increase of 179,000 jobs in May. Economists had been expecting employment to climb by about 205,000 jobs.
The data came ahead of key US jobs data due tomorrow, which is important from the perspective of Fed's monetary policy. Economists expect the economy to have added 215,000 jobs in June, after the addition of 217,000 jobs a month earlier. The unemployment rate is expected to remain unchanged at 6.3%.
The greenback resumed it advance to a 5-day high of 101.67 against the yen, reversing from an early low of 101.40. If the greenback extends rise, it may find resistance around the 102.5 zone. The pair was valued at 101.51 at yesterday's close.
Japan's monetary base surged 42.6% on year to 233.246 trillion yen in June, the Bank of Japan said. That follows the 45.6% spike in May.
The greenback rose to 2-day highs of 0.8898 against the Swiss franc and 1.3641 against the euro, compared to 0.8874 and 1.3678, respectively hit at yesterday's close. The next possible resistance for the greenback is seen around 0.895 against the franc and 1.36 against the euro.
The greenback rebounded to 1.7139 against the pound following the data, after having fallen to a 5-1/2-year low of 1.7175 at 4:30 am ET . Next key upside target for the greenback is seen around the 1.70 zone. The pair was valued at 1.7148 when it closed deals on Tuesday.
The UK construction PMI climbed to 62.6 in June from May's seven-month low of 60, data from Markit /CIPS showed. The index marked the fastest rate of increase since February.
The greenback rallied to 0.9429 against the aussie, up by 0.7% from yesterday's closing value of 0.9495. Continuation of ascending trend may take the greenback to a resistance around the 0.935 mark.
The greenback reversed from an early low of 0.8774 against the NZ dollar with pair trading at 0.8758. The greenback is thus heading to pierce its early 2-day high of 0.8747. The greenback is poised to test resistance around the 0.868 region.
The greenback came off from early near 6-month low of 1.0626 against its Canadian rival, edging up to 1.0646. At Tuesday's close, the pair was worth 1.0630. Further gains may possibly see the greenback finding resistance around the 1.07 zone.
Looking ahead, US factory orders data for May is due shortly.
The Fed Chairwoman Janet Yellen is scheduled to deliver a Central Banking Lecture at the IMF headquarters in Washington at 11:00 am ET