US Dollar Edges Higher on ADP Employment Report
The US dollar advanced for the fourth time in the past five days after December employment growth topped forecasts, raising expectations for another round of stimulus cuts from the Federal Reserve.
Private sector job growth accelerated to 238,000 last month, according to the ADP Institute. The closely monitored report provides a snapshot of what to expect from the official jobs data, which will be released by the Labor Department on Friday. The government report is expected to show more than 195,000 nonfarm payrolls were added to the US economy last month, according to several forecasts.
The US dollar index rose nearly 0.3 percent to 80.16, having gained more than 1 percent over the previous five days. Market participants are likely to view upbeat employment data as another reason for the Fed to continue tapering bond purchases. The Fed initiated its first taper this month after the jobless rate unexpectedly fell to 7 percent in November.
The greenback enjoyed new highs against the Canadian dollar, soaring 61 pips to close the North American session at 1.0827 CAD. The dollar edged up 46 pips against the euro, which was unable to capitalize on the strongest retail sales report in 12 years. In Asia, the greenback was rejected at 1.05 yen, consolidating at 1.0483, a gain of more than 0.1 percent.
The American currency faltered versus the pound, shedding 48 pips. At the close of North American trade, the British pound was trading at 1.6450 US.
Thursday’s trade will feature heavy speculation from both sides of the Atlantic as investors digest the minutes of the latest FOMC policy meetings, while dissecting the latest rate decisions from the Bank of England and European Central Bank. The FOMC minutes will divide the doves from the hawks and provide investors with input regarding the future of quantitative easing.
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