Dollar remains near 4-year peak after ADP report

Investing.com - The dollar remained close to four year highs against a basket of other major currencies on Wednesday, after data showed that U.S. non-farm private employment rose more-than-expected in September.

Dollar holds close to 4-year highs vs. rivals as jobs data supports

In a report, payroll processing firm ADP said non-farm private employment rose 213,000 last month, above expectations for an increase of 210,000. The economy created 202,000 jobs in August.

USD/JPY hit highs of 110.09, the most since August 2008, before retracing some of those gains to trade at 109.93, 0.26% higher for the day.

The dollar has rallied against the euro and the yen in recent months, amid expectations that the Federal Reserve is growing closer to raising interest rates, while central banks in Europe and Japan look likely to stick to a looser monetary policy stance.

EUR/USD touched lows of 1.2584, not far from Tuesday’s two year trough of 1.2570, and was last down 0.31% to 1.2594.

The drop in the euro came after research group Markit reported that the final reading of the euro zone’s manufacturing purchasing managers index ticked down to a 14-month low of 50.3 in September from 50.5 in August.

The German manufacturing PMI slid to 49.9 from 50.3 previously, falling below the 50 level that separates growth from contraction for the first time in 15 months.

The report came a day after data showed that the annual rate of euro area inflation fell to a five year low of 0.3% in September.

The weak data added to pressure on the ECB to implement additional stimulus measures to stave off the threat of deflation in the region, ahead of its monthly meeting on Thursday.

GBP/USD fell to lows of 1.6162 before recovering back to trade at 1.6193, down 0.12% for the day.

Sterling slipped after data showed that output in the U.K. manufacturing sector slowed to a 17 month low in September.

The U.K. manufacturing PMI fell to 51.6 last month from 52.2 in August. Economists had expected the index to tick up to 52.5.

The slowdown in factory activity was likely to ease pressure on the Bank of England to raise rates despite the ongoing strong recovery in the U.K.

The Swiss franc was close to 14-month lows, with USD/CHF rising 0.39% to trade at 0.9586.

Elsewhere, AUD/USD hit 10-month lows of 0.8664 overnight before pulling back to 0.8696, down 0.59% for the day after data showed that Australian retail sales rose less-than-expected in July.

NZD/USD was down 0.16% to 0.7798, while USD/CAD edged up 0.11% to almost six month highs of 1.1209.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was last at up 0.14% to 86.16, not far from Tuesday’s peaks of 86.34, a high last seen in June 2010.

Forex - GBP/USD dips despite soft U.S. consumer confidence report

sting.com - The pound traded lower against the dollar on Tuesday after investors shrugged off lackluster U.S. data and bet the Federal Reserve remains on track to hike interest rates sooner in 2015 than once expected.

Pound dips against dollar despite soft U.S. data

In U.S. trading on Tuesday, GBP/USD was down 0.15% at 1.6218, up from a session low of 1.6167 and off a high of 1.6287.

Cable was likely to find support at 1.6160, the low from Sept. 16, and resistance at 1.6418, last Tuesday's high.

In the U.S. earlier, the Conference Board reported that its consumer confidence index fell to 86.0 this month from 93.4 in August, whose figure was revised up from a previously reported 92.4.

Analysts expected the index to decline to 92.5 in September.

A separate report showed that a Chicago-area purchasing managers' index fell to 60.5 this month from 64.3 in August. Analysts had expected the index to decline to 61.9 in September.

The dollar still enjoyed support due to expectations that the Fed is moving closer to hiking interest rates, as despite hiccups here and there, longer-term analysis of U.S. indicators points to an economy that is gaining steam.

Meanwhile in the U.K., the Office for National Statistics said that the revised gross domestic product expanded by 0.9% in the second quarter, beating expectations for 0.8% growth and up from a previous estimate of 0.7%.

Year-on-year, the U.K. economy expanded at a 3.2% rate in the second quarter, in line with expectations.

The numbers sent the pound firming against the dollar earlier though profit taking wiped out sterling's gains.

A separate report showed that the U.K. current account deficit widened to £23.1 billion in the last quarter from a revised deficit of £20.5 billion in the first three months of the year. Analysts had expected the current account deficit to narrow to £17.0 billion in the second quarter.

Earlier in the day, the Nationwide Building Society reported that U.K. house prices fell 0.2% this month, compared to expectations for an increase of 0.5%, after a 0.8% gain in August.

Elsewhere, sterling was up against the euro, with EUR/GBP down 0.33% at 0.7786, and up against the yen, with GBP/JPY up 0.02% at 177.87.

On Wednesday, the U.S. is to release the ADP report on private sector job creation, which leads the government’s nonfarm payrolls report by two days. Later in the session, the Institute of Supply Management is to release a report on manufacturing activity.

The U.K. is to publish data on manufacturing activity.

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