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Dollar trims gains after mixed U.S. economic reports

Published 05/04/2016, 08:39 AM
Dollar pulls away from session highs after ADP report disappoints
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Investing.com - The dollar trimmed gains against the other major currencies on Wednesday, after data showed that U.S. nonfarm private employment rose less than expected in April and that the U.S. trade deficit narrowed more than initially anticipated in March.

USD/JPY slipped 0.19% to 106.42, moving closer to Tuesday’s 18-month low of 105.55.

Payroll processing firm ADP said non-farm private employment rose by 156,000 last month, missing expectations for an increase of 196,000.

The economy created 194,000 jobs in March, whose figure was downwardly revised from a previously reported increase of 200,000.

A separate report showed that the U.S. trade deficit narrowed to $40.44 billion in March from $46.96 billion in February, whose figure was revised from a previously estimated deficit of $47.10 billion.

Analysts had expected the trade deficit to narrow to $41.50 billion in March.

The greenback has been hovering at multi-month lows since the Federal Reserve decided last Wednesday to leave interest rates unchanged and indicated that any future interest rate hikes would be data dependent.

EUR/USD was little changed at 1.1499.

Earlier Wednesday, research group Markit said its euro zone services purchasing managers’ index slipped to 53.1 in April from 53.2 the previous month, confounding expectations for an unchanged reading.

The dollar edged higher against the pound and the Swiss franc, with GBP/USD down 0.09% at 1.4523 and with USD/CHF adding 0.13% to 0.9554.

Sterling weakened after Markit said its U.K. construction PMI fell to 52.0 last month from March’s reading of 54.2. That was its slowest pace since June 2013. Economists had expected the index to inch down to 54.0 in March.

The Australian dollar was steady, with AUD/USD at 0.7481, while NZD/USD slipped 0.18% to 0.6903.

Statistics New Zealand reported on Wednesday that the unemployment rate rose to 5.7% in the first quarter from 5.3% in the three months to December, compared to expectations for an uptick to 5.5%.

The report also showed that the number of employed people rose by 1.2% in the last quarter, beating expectations for a 0.7% gain and following an increase of 0.9% in the third quarter of 2015.

Elsewhere, USD/CAD gained 0.48% to 1.2785, the highest since April 22, after Statistics Canada said the trade deficit widened to C$3.41 billion in March from C$2.47 billion in February, whose figure was revised from a previously estimated deficit of C$1.91 billion.

Analysts had expected the trade deficit to narrow to C$1.40 billion in April.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was little changed at 93.03, off the previous session’s 16-month trough of 91.89.

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