Dollar Muted After ADP Private Payrolls Data
31 March 2021 - 8:56PM
RTTF2
The U.S. dollar showed muted trading against its major
counterparts in the European trading session on Wednesday, after
the release of ADP data showing strong private sector job growth in
the month of March.
Data from payroll processor ADP showed that private sector
employment surged up by 517,000 jobs in March after climbing by an
upwardly revised 176,000 jobs in February.
Economists had expected employment to jump by 550,000 jobs
compared to the addition of 117,000 jobs originally reported for
the previous month.
On Friday, the Labor Department is scheduled to release its more
closely watched monthly jobs report, which includes both public and
private sector jobs.
Investors awaited President Joe Biden's infrastructure plan
worth around $2.25 trillion set to be unveiled later in the
day.
The plan will fund road and bridge projects and boost
investments in climate infrastructure and research and
development.
The plan will be funded by tax hikes, including an increase of
the corporate tax rate to 28 percent from 21 percent.
The greenback was higher in the Asian session on the back of
rising U.S. treasury yields.
The greenback recovered to 1.1721 against the euro, from a low
of 1.1748 hit at 4:30 am ET. The greenback is on course to pierce a
multi-month high of 1.1704 seen in the Asian session. If the
greenback rises further, 1.14 is likely seen as its next resistance
level.
Flash data from Eurostat showed that Eurozone consumer prices
increased at a faster pace in March.
Inflation advanced to 1.3 percent in March, in line with
expectations, from 0.9 percent in February. This was the third
consecutive rise in prices.
The greenback rose back to 0.9443 against the franc, not far
from the Asian session's peak of 0.9447, which was its biggest
level since July 2020. At yesterday's trading close, the pair was
quoted at 0.9420. On the upside, 0.96 is possibly seen as its next
resistance level.
The greenback remained higher against the yen, with the pair
worth 110.80. This may be compared to more than a 1-year high of
110.96 set at 11:00 pm ET. The pair had closed Tuesday's deals at
110.35. The next likely resistance for the greenback is seen around
the 112.00 region.
Data from the Ministry of Land, Infrastructure, Transport and
Tourism showed that Japan housing starts continued to decline in
February.
Housing starts decreased 3.7 percent year-on-year in February,
bigger than the 3.1 percent fall in January and 4.8 percent decline
expected by economists.
The U.S. currency staged a modest recovery to 1.3754 against the
pound, following a 2-day low of 1.3794 logged at 5:30 am ET. The
pound-greenback pair had ended yesterday's trading session at
1.3740. The greenback is likely to test resistance around the 1.34
region.
Data from the Office for National Statistics showed that the UK
economy grew more than previously estimated in the fourth quarter
but the overall contraction for the whole year of 2020 was the
biggest on record.
Gross domestic product grew 1.3 percent sequentially in the
fourth quarter instead of +1 percent estimated initially. The
economy had expanded sharply by 16.9 percent in the third quarter.
U.S. pending home sales for February are due out at 10:00 am
ET.
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