Investing.com - The dollar remained near more than four-year highs against a basket of other major currencies on Wednesday, after data showed that service sector activity in the U.S. grew at a faster rate than expected in November
In a report, the Institute of Supply Management said its non-manufacturing purchasing manager's index rose to 59.3 last month from a reading of 57.1 in October. Analysts had expected the index to inch up to 57.5 in November.
The data came after payroll processor ADP reported that the U.S. private sector created 208,000 jobs in November, falling short of expectations for jobs growth of 223,000 and down from 233,000 in October.
The U.S. dollar index, which measures the greenback against a basket of six major currencies, was up 0.26% to more than four-year highs of 88.93.
The yen fell to fresh seven-year lows against the yen on Wednesday, as the diverging policy outlook between the Federal Reserve and the Bank of Japan continued to weigh.
USD/JPY touched highs of 119.77, the most since July 2007 and was last at 119.68, up 0.36% for the day.
The yen has weakened broadly since the BoJ unexpectedly expanded its stimulus program in late October. In contrast, the Fed wound up its asset purchase program in October and is weighing whether or not the economy is strong enough to start raising interest rates next year.
EUR/USD touched more than two-year lows of 1.2302 and was last down 0.51% to 1.2320 after surveys of business activity across the euro zone indicated that the region would post only marginal economic growth in the fourth quarter.
The euro zone composite PMI, which covers the manufacturing and service sectors across the currency bloc, fell to 51.1 last month from 52.1 in October.
The weak data added to pressure on the European Central Bank to step up measures to spur growth and combat persistently low levels of inflation in the region ahead of its monetary policy meeting on Thursday.
The pound was higher, with GBP/USD up 0.46% to 1.5709 after data showed that U.K. service sector output rose at a faster than expected pace in November, easing concerns that the economic recovery is moderating.
The U.K. services PMI rose to 58.6 last month from 56.2 in October. Economists had expected the index to tick up to 56.6.
The dollar gained ground against the Swiss franc, with USD/CHF up 0.46% to 0.9766.
The Australian dollar remained near four-year lows, with AUD/USD down 0.31% to 0.8423 after data overnight showed that the country’s economy grew 0.3% in the third quarter, less than the expected 0.7% increase, and expanded by a smaller than expected 2.7% from a year earlier.
Elsewhere, NZD/USD declined 0.32% to 0.7781 and USD/CAD retreated 0.43% to trade at 1.1357 after the Bank of Canada left its benchmark interest rate unchanged at 1%, while saying that it saw signs of a broadening recovery.