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, but service sector activity slowed.
The US dollar index, which tracks the performance of the greenback against a basket of six major currencies, was up 0.45% 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.
Separately the Institute of Supply Management said that its non-manufacturing index slowed to 57.1 last month from 58.6 in September, against expectations of 58.0.
However, new orders remained strong and the employment component of the index rose to 59.6 from 58.5, boosting the outlook for Friday’s official nonfarm payrolls report, which has a consensus forecast for jobs growth of 231,000.
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.
The dollar was close to seven year highs against the yen, with USD/JPY up 0.79% to 114.48 after rising as high as 114.84 earlier, the most since December 2007.
EUR/USD was down 0.45% to 1.2484, not far from the two-year trough of 1.2437 struck on Monday as investors awaited Thursday’s monetary policy decision by the European Central Bank.
The ECB was widely expected to keep monetary policy unchanged, but the Bank of Japan’s surprise stimulus move on Friday fuelled expectations that it will soon follow suit in order to spur growth and inflation in the euro area.
GBP/USD slumped to one year lows of 1.5869, before pulling back to 1.5971 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 0.44% to 0.9641.
The Canadian dollar pushed higher, with USD/CAD slipping 0.14% to 1.1393, off the more than five year highs of 1.1467 struck earlier in the session as weaker global oil prices weighed on the loonie.
The Australian and New Zealand dollars were sharply lower, with AUD/USD dropping 1.68% to 0.8589 and NZD/USD dropping 1.25% to 0.7713.