Dollar Gains Against Peers

The U.S. dollar stayed firm against most of its peers on Wednesday amid fears of an imminent deep recession due to the impact of the rapidly spreading coronavirus pandemic.

A report from payroll processor ADP said private sector employment fell by 27,000 jobs in March in the U.S. after jumping by a downwardly revised 179,000 jobs in February.

The dollar index rose to 99.84 this afternoon, but gave up much of its gains subsequently and was last seen at 99.41, up 0.35% from Tuesday’s close.

Economists had expected private sector employment to plunge by 150,000 jobs compared to the addition of 183,000 jobs originally reported for the previous month.

The drop was much smaller than expected but still reflects the first decrease in private sector employment since September of 2017.

The Institute for Supply Management’s report showed a contraction in U.S. manufacturing activity in the month of March.

The ISM said its purchasing managers index dipped to 49.1 in March after edging down to 50.1 in February. While a reading below 50 indicates a contraction in manufacturing activity, economists had expected the index to show a steeper drop to 45.0.

Against the euro, the dollar strengthened to $1.0964 from $1.1041, gaining more than 0.6% after data showed that Eurozone manufacturing activity contracted at the fastest pace in more than seven years in March amid virus outbreak.

Final data from IHS Markit showed that the final factory Purchasing Managers’ Index fell to 44.5 from 49.2 in February. The reading was also below the flash estimate of 44.8.

Data from Eurostat showed that Euro area jobless rate unexpectedly eased to its lowest level since in over a decade in February, just ahead of the announcement of coronavirus pandemic containment measures in several countries in the region.

The jobless rate fell to 7.3 percent, while economists had expected it to remain unchanged at January’s 7.4 percent. That was the lowest rate since March 2008, the agency added.

The score has remained below 50.0 for fourteen consecutive months and reached its lowest level in 92 months.

Against Pound Sterling, the dollar firmed up to $1.2377 from Tuesday’s $1.2412, rising more than 0.3%.

Final survey data from IHS Markit showed that the UK manufacturing activity contracted in March due to the outbreak of coronavirus and subsequent mitigation efforts.

The dollar was lower against the Yen, with a unit fetching 107.15 yen, about 0.35% less than 107.94 yen on Tuesday.

The dollar gained nearly 0.8% against the loonie, at 1.4170.

Against Swiss franc, the greenback was up at 0.9658, while against the Aussie, the dollar gained nearly 1% with the pair trading at 0.6076.

Leave a Reply

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