The U.S. dollar pared gains against the yen on Wednesday,
following the release of disappointing U.S. private sector payrolls
data.
This mornings ADP nonfarm payrolls data showed that the U.S.
private sector added 139,000 jobs in February, well below expectations for an
increase of 160,000.
And there was more bad news later on when the
Institute of Supply Management said its non-manufacturing purchasing manager’s
index fell to a 43-month low of 51.6 last month from 54.0 in January.
Confounding expectations for a fall to 53.5 in February.
The data caused
the dollar to give-up ground against the Japanese yen which suffered in risk-off
trading after tensions eased in the standoff between Ukraine and
Russia.
USD/JPY ended the session up 0.10% at 102.32, down from a high of
102.55 earlier.
While the euro trimmed losses against the dollar after
this mornings data. The single currency couldn’t find any friends this morning,
despite data showing that euro zone private sector activity grew more rapidly
than initially estimated in February, expanding at the fastest pace since June
2011.
Investors remain wary of this weeks European Central Bank’s meeting
on Thursday amid concerns that the bank could tighten monetary
policy.
EUR/USD ended the session down 0.03% at 1.3738, up from a low of
1.3707 earlier.
The pound also found support this morning after official
data showed that activity in the U.K. service sector dipped in February, but
growth remained robust.
GBP/USD ended the session up 0.40% at
1.6731.
Elsewhere, the U.S. dollar fell against the Canadian dollar after
the Bank of Canada left rates on hold at 1.00% on Wednesday, a decision that was
widely anticipated.
The bank said economic growth in the fourth quarter
of 2013 was slightly stronger than anticipated, adding that it still expects
growth of 2.5% in 2014.
However, the bank also said inflation is expected
to remain well below target for some time and the direction of the next change
to the policy rate will be data dependent.
USD/CAD closed the session
down 0.45% at 1.1042.
And the Australian dollar moved higher, despite the
Reserve Bank of Australia indicating the Aussie needs to keep falling if the
economic recovery is to take hold.
AUD/USD climbed 0.39% to
0.8987.
Finally, the New Zealand dollar moved higher against the
greenback as concerns about the crisis in Ukraine ease.
NZD/USD climbed
0.35% to 0.8419.
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