Investing.com - The dollar edged higher to trade near a two-month peak against the other major currencies on Thursday, as growing expectations for a December rate hike by the Federal Reserve continued to support the greenback.
The dollar was boosted after the Institute of Supply Management said on Wednesday that its non-manufacturing purchasing manager's index rose to an 11-month high of 57.1 last month from 51.4 in August.
Analysts had expected the index to increase to 53.0.
On a less positive note, payroll processing firm ADP said non-farm private employment rose by 154,000 last month, below forecasts for an increase of 166,000.
Market participants were focusing on Friday’s U.S. nonfarm payrolls report for further indications on the strength of the job market, as the Federal Reserve has indicated that future interest rate decisions will be data-dependent.
EUR/USD edged 0.12% lower to 1.1190.
In the euro zone, data earlier showed that German factory orders rose 1.0% in August, beating expectations for an uptick of 0.2%. German factory orders increased by 0.3% in July, whose figure was revised from a previously estimated 0.2% gain.
Meanwhile, speculation over the possibility that the European Central Bank could scale back its asset purchase program sooner than expected subsided after officials denied the rumors, saying that Governing Council “has not discussed these topics”.
GBP/USD slipped 0.13% to trade at a 31-year low of 1.2727.
Elsewhere, USD/JPY eased up 0.08% to a one-month high of 103.59, while USD/CHF added 0.27% to 0.9767.
The Australian and New Zealand dollars were weaker, with AUD/USD down 0.38% at 0.7592 and with NZD/USD dipping 0.08% to 0.7166.
Markets shrugged off a report by the Australian Bureau of Statistics showing that the trade deficit narrowed to A$2.010 billion in August from A$2.121 billion in July. Analysts had expected the trade deficit to hit A$2.300 billion in August.
Elsewhere, USD/CAD held steady at 1.3184.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.16% at 96.28, close to Tuesday’s two-month peak of 96.39.