Investing.com - The dollar remained close to four year highs against a basket of other major currencies on Wednesday after data showed that the U.S private sector added more jobs than expected last month and investors awaited data on service sector activity.
The US dollar index, which tracks the performance of the greenback against a basket of six major currencies, was up 0.43% to 87.56, not far from four year highs of 87.72.
Payroll processor ADP reported that the U.S. private sector added 230,000 jobs last month, ahead of expectations for jobs growth of 220,000. September’s figure was revised up to 225,000.
The Institute of Supply Management was to release data on service sector activity later in the trading day.
The dollar made broad gains earlier Wednesday as the results of U.S. mid-term elections were seen as positive for the economy.
The Republican Party took control of the U.S. senate and extended their majority in the House of Representatives, riding a wave of voter dissatisfaction with President Barack Obama’s party at the polls.
The result boosted hopes for an end to political deadlock in Washington.
USD/JPY was up 0.83% to 114.54, the most since December 2007.
The yen showed little reaction to a speech by Bank of Japan Governor Haruhiko Kuroda on Wednesday, who said that a weak yen has various positive effects on the Japanese economy.
EUR/USD was down 0.30% to 1.2505, not far from the two-year trough of 1.2437 struck on Monday as investor’s awaited Thursday’s monetary policy decision by the European Central Bank.
The ECB was widely expected to keep monetary policy unchanged, but the BoJ’s surprise stimulus move on Friday has fuelled expectations that it will soon follow suit in order to spur growth and inflation in the euro area.
Data on Wednesday showed that the euro zone composite services purchasing managers’ index, which measures activity across the region’s private sector, edged up to 52.1 from 52.0 in September, indicating only modest growth.
A separate report showed that euro zone retail sales dropped 1.3% from a month earlier in September, compared to expectations for a decline of 0.8%. It was the biggest monthly decline since April 2012.
GBP/USD slumped to one year lows of 1.5869, before pulling back to 1.5932 after a report showed that the U.K. service sector expanded at the slowest rate in 17 months in October, adding to signs that the pace of the economic recovery is cooling.
Research firm Markit reported that the U.K. services PMI fell to 56.2 last month from 58.7 in September. Economists had expected the index to tick down to 58.5.
Elsewhere, USD/CHF was up 0.31% to 0.9628.
The Canadian dollar near more than five year lows against the greenback as lower world oil prices continued to weigh, with USD/CAD at 1.1417.
The Australian and New Zealand dollars were sharply lower, with AUD/USD dropping 1.28% to 0.8623 and NZD/USD down 0.74% to 0.7754.
The kiwi rose to session highs of 0.7842 overnight after data showed that New Zealand’s unemployment rate fell to 5.4% in the third quarter from 5.6% in the previous three months.