Dollar Muted After Strong ADP Private Payrolls Data; Fed Decision In Focus
01 Mai 2019 - 11:01AM
RTTF2
The U.S. dollar showed muted trading against its major
counterparts in the European session on Wednesday, after ADP
private sector employment surged up more than expected in April,
while investors awaited the outcome of the Fed meeting for
indications on the future trajectory of interest rates.
Data from payroll processor ADP showed that private sector
hiring overwhelmed expectations in April following a much weaker
than expected job growth in the previous month.
ADP said private sector employment surged up by 275,000 jobs in
April after climbing by an upwardly revised 151,000 jobs in
March.
Economists had expected employment to increase by about 180,000
jobs compared to the addition of 129,000 jobs originally reported
for the previous month.
The Federal Reserve is widely expected to leave interest rates
unchanged when it ends a two-day policy meeting later in the
day.
Traders are likely to keep a close eye on the accompanying
statement and Fed Chairman Jerome Powell's subsequent press
conference for clues on the outlook for interest rates.
As Fed officials gathered for their two-day meeting that kicked
off on Tuesday, Trump urged the central bank to cut interest rates
by a full percentage point and inject bond-buying stimulus it
launched after the Great Recession.
"Our Federal Reserve has incessantly lifted interest rates, even
though inflation is very low, and instituted a very big dose of
quantitative tightening," Trump said in a post on Twitter.
The ADP report serves as a useful precursor to the Labor
Department' monthly payrolls data, due Friday.
Economists expect the economy to have added 187,000 jobs in
April, with a jobless rate of 3.8 percent.
The currency held steady against its major counterparts in the
Asian session.
The greenback declined to more than a 2-week low of 1.3077
against the pound shortly before the data and held steady
thereafter. Next key support for the greenback is seen around the
1.32 level.
Survey data from IHS Markit showed that UK manufacturing
expansion slowed to a two-month low in April amid a decline in
export business and an easing in the robust pace of
stock-building.
The IHS Markit/CIPS Purchasing Managers' Index, or PMI, fell to
53.1 in April from March's 13-month high of 55.1. The score was in
line with economists' expectations.
The greenback held steady against the Japanese yen, after having
retreated to 111.26 from a high of 111.55 hit at 3:00 am ET. The
pair ended Tuesday's trading at 111.42.
The greenback slid to 1.1240 against the euro, an 8-day low, at
5:30 am ET and moved sideways in subsequent deals. The pair was
valued at 1.1215 when it closed deals on Tuesday.
After falling to an 8-day low of 1.0152 against the franc around
6:20 am ET, the greenback traded steadily during the course of
session. The greenback-franc pair closed yesterday's deals at
1.0191.
The U.S. construction spending for March and ISM manufacturing
for April will be released at 10:00 am ET.
The Fed announces its interest rate decision at 2:00 pm ET.
Economists widely expect the fed funds rate to remain in a range
between 2.25 percent and 2.50 percent.
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