Dollar Edges Higher After Recent Weakness

The U.S. Dollar edged higher on Wednesday, rebounding from recent losses, as traders awaited possible interest rate cuts and other monetary easing measures from other central banks after the Federal Reserve announced a surprise rate cut on Tuesday.

Traders were also tracking news about the spread of coronavirus infections, and reacting to the latest batch of economic data.

The dollar index, which rose to 97.59 in mid morning trades, later eased to 97.40, but was still up 0.25% from previous close.

Against the Euro, the dollar was up more than 0.3% at 1.1135.

The Pound Sterling was little changed at 1.2872

The Japanese Yen was down at 107.29 a dollar, compared to 107.13 on Tuesday.

Against the Aussie, the dollar was trading at $0.6627, down from previous close of $0.6584.

The loonie was trading at 1.3388 a dollar, compared to 1.3380 a dollar on Tuesday.

The Swiss franc was little changed against the dollar with a unit of greenback fetching 0.9574 franc, compared to 0.9564 Tuesday afternoon.

In economic news, private sector employment in the U.S. increased by more than expected in the month of February, according to a report released by payroll processor ADP on Wednesday.

ADP said private sector employment climbed by 183,000 jobs in February after jumping by a downwardly revised 209,000 jobs in January.

Economists had expected employment to rise by about 170,000 jobs compared to the spike of 291,000 jobs originally reported for the previous month.

The Institute for Supply Management’s report said its non-manufacturing index climbed to 57.3 in February from 55.5 in January, with a reading above 50 indicating growth in service sector activity.

The increase by the reading on service sector activity came as a surprise to economists, who had expected the index to edge down to 54.9.

A compilation of anecdotal evidence on economic conditions in the twelve Federal Reserve districts said Wednesday that U.S. economic activity expanded at a modest to moderate rate over the past several weeks.

The Fed report, known as the Beige Book, also said most continue to expect modest economic growth in the near term but noted potential risks from the coronavirus outbreak and the upcoming presidential election.

While a majority of Fed districts reported modest to moderate growth, the central bank said the St. Louis and Kansas City Districts reported no change during the period.

The Beige Book also said consumer spending generally picked up but noted growth was uneven across the nation, including mixed reports on auto sales.

Meanwhile, the report said there were indications the coronavirus was negatively impacting travel and tourism in the U.S., with growth in tourism described as flat to modest.

Leave a Reply

Your email address will not be published. Required fields are marked *