Forex - Australian dollar holds gains despite weak services index survey

Investing.com - The Australian dollar held gains Wednesday despite a private survey weak services index with the New Zealand dollar also up after solid jobs data.

NZD/USD traded at 0.7821, up 0.13%, while AUD/USD traded at 0.8752, up 0.18%, and USD/JPY held at 113.48, down 0.11%.

In Australia the AiG services index for October fell 1.8 points to 43.6, signaling weak sales and new orders heading into Christmas.

In New Zealand, the unemployment rate held steady at 5.4% as expected in the third quarter. with employment up 0.8%

In Japan, September average cash earnings data are due at 1030 Tokyo (0130 GMT). In August, nominal wages rose 0.9% from a year earlier, marking the sixth straight
rise.

At 1130 (0230 GMT), Bank of Japan Governor Haruhiko Kuroda is due to give a speech at a seminar hosted by Kyodo News in Tokyo.

Elsewhere, China's HSBC October services PMI is due at 0945 local time (0145 GMT). Although services accounts for an ever-greater slice of economic activity in China, it's the manufacturing PMIs which have the market's attention.

Overnight, less-than-stellar U.S. reports on factory orders and the country's trade balance weakened the dollar against most major currencies, ending several session of strong gains fueled by diverging global monetary policies.

U.S. factory orders fell for a second consecutive month in September, dampening optimism over the pace of U.S. recovery, official data revealed earlier.

The U.S. Census Bureau reported earlier that factory orders declined by 0.6% in September, in line with market expectations though still a decline nonetheless.

The August figure was revised to a 10% contraction from an initial 10.1% decline.

The numbers gave investors room to sell the greenback for profits, wiping out gains stemming from divergent monetary policies coupled with upbeat U.S. manufacturing, consumer sentiment and economic growth reports.

Elsewhere in the U.S., the Bureau of Economic Analysis said the country's trade deficit widened to $43.03 billion in September from $39.99 billion in August, whose figure was revised from a previously reported deficit of $40.1 billion.

Analysts had expected the U.S. trade gap to widen to $40.0 billion in September.

The single currency held well into positive territory despite downward revisions made to the continent's growth forecasts.

The European Commission cut its forecast for euro zone economic growth to 0.8% this year from a 1.2% forecast made in the spring, while the 2015 growth forecast dipped to 1.1% from 1.7%.

The commission added it expects euro area inflation to remain below the European Central Bank's target of close to but just below 2% until after 2016 at the earliest and warned that unemployment levels will remain at their current high levels for longer than previously expected.

The US dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.03% at 87.15.

On Wednesday, expect the dollar to move on U.S. service-sector data.