Investing.com - The dollar pushed higher against the other major currencies on Wednesday, reaching a new nine-year peak after data showed that U.S. private sector employment rose more-than-expected in December, fuelling optimism over the strength of the country's labor market.
In a report, payroll processing firm ADP said non-farm private employment rose by 241,000 last month, above expectations for an increase of 226,000. The economy created 227,000 jobs in November, whose figure was upwardly revised from a previously reported 208,000.
The U.S. dollar index, which measures the greenback against a basket of six major currencies, was up 0.46% at 92.29, the highest since December 2005.
The euro dropped to fresh nine-year lows against the dollar, with EUR/USD at 1.1823, down 0.56% for the day after data showing that consumer prices in the euro area fell in December for the first time in more than five years.
Eurostat reported that the annual rate of euro zone inflation fell by 0.2% in December, down from 0.3% in November. Economists had expected an annual decline of 0.1%. It was the first fall in the annual rate of inflation since October 2009.
Core inflation, which strips out volatile measures such as food and energy costs, rose 0.8% on a year-over-year basis, but was still well below the European Central Bank's target of close to, but just under 2%.
The data added to expectations that the ECB could implement quantitative easing as soon as its next meeting on January 22. Late last week ECB President Mario Draghi said the risk of it not fulfilling its mandate of price stability is higher now than six months ago.
In a separate report Wednesday, Eurostat said the euro zone’s unemployment rate was unchanged at 11.5% in November for the sixth straight month, but the number of people without jobs rose for the third consecutive month, by 34,000 to 18.394 million.
The dollar climbed higher against the yen, with USD/JPY up 0.79% to 119.37, while USD/CHF advanced 0.57% to 1.0158.
Modest gains in Asian equity markets overnight dampened demand for the safe haven yen as investor sentiment recovered following a selloff earlier in the week.
Elsewhere, sterling hit a new 17-month trough amid mounting speculation that the Bank of England will keep rates on hold for most of 2015.
GBP/USD slipped 0.24% to 1.5115, the lowest level since August 2013.
The commodity-exposed Australian, New Zealand and Canadian dollars remained close to multi-year lows, as a rout in global oil prices continued.
AUD/USD fell 0.27% to 0.8062, NZD/USD shed 0.31% to trade at 0.7736 and USD/CAD edged down 0.08% to 1.1828.
Later in the day, the Fed was to publish the minutes of its most recent meeting.