Dollar Loses Ground Against Major Currencies

Trading 03 avr 2019 Donner votre avis

The U.S. dollar softened against major currencies on Wednesday, reacting to some fairly encouraging data from eurozone and on rising optimism about U.S.-China trade negotiations.

Also, data from private sector payroll processor ADP and the Institute for Supply Management showed a drop in private sector job growth and service sector growth, respectively.

The dollar index dropped to a low of 96.96, and was last seen hovering around 97.10, down more than 0.2% from previous close.

Against the Euro, the greenback was down by about 0.25%, at $1,238, after having traded around $1.208 on Tuesday.

The British Pound Sterling was up 0.18% at $1.3158, rising for a third straight day.

The sterling rose on hopes there will not be a no-deal Brexit after the Prime Minister Theresa May and Labor leader Jeremy Corbyn met to discuss ways to break the deadlock.

However, Corby reportedly said after the meeting that talks were useful but inconclusive.

The U.S. dollar was stronger against another safe haven, the Japanese yen. The Japanese currency was trading at 111.49 a dollar, after hitting a high of 111.21 a dollar.

The dollar was gaining about 0.08% against the loonie, with the pair trading at 1.3348. Against the franc, the greenback was up marginally at 0.9982.

A report from payroll processor ADP showed much weaker than expected private sector job growth in the month of March. The report said private sector employment rose by 129,000 jobs in March after jumping by an upwardly revised 197,000 jobs in February.

Economists had expected employment to increase by 170,000 jobs compared to the addition of 183,000 jobs originally reported for the previous month.

A separate report from the Institute for Supply Management showed service sector growth in the U.S. cooled off in March after a significant acceleration in the previous month.

The ISM said its non-manufacturing index slid to 56.1 in March after jumping to 59.7 in February, although reading above 50 still indicates growth in the service sector.

Economists had expected the index to show a more modest pullback, with forecasts calling for the index to dip to 58.0.

In Eurozone economic news, retail sales grew for a second consecutive month and at a faster-than-expected pace of 0.4% (month-on-month) in February in the euro area, preliminary data from Eurostat showed.

On a year-on-year basis, retail sales rose 2.8% after a 2.2% increase in January. Economists had expected 1.5% growth.

Among other positive economic news from Europe, Spain's service sector grew at the fastest pace in over a year, Italy's services sector grew at the fastest pace in six months in March.

Meanwhile, UK service sector shrunk for the first time in over two-and-a-half years in March as domestic political uncertainty damped demand amid labor shortages, survey data from IHS Markit showed on Wednesday. The services purchasing managers' index, or PMI fell to 48.9 in March from 51.3 in February. Economists had expected a score of 51.

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