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FOREX-Dollar weakens after ADP miss, euro hits fresh one-month high

reuters.com · 09/01/2021 10:52
FOREX-Dollar weakens after ADP miss, euro hits fresh one-month high

Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

By Chuck Mikolajczak

- The dollar fell against a basket of major currencies on Wednesday after a report on the U.S. labor market fell well short of expectations, while the euro held near a one-month high on inflation worries.

The greenback added to losses after the ADP National Employment Report showed private payrolls rose by 374,000 in August, up from 326,000 in July but well short of the 613,000 forecast. nL1N2Q30WG

The report comes ahead of weekly initial jobless claims on Thursday and the key government payrolls report for August, which could provide clues about the Federal Reserve's policy path.

"It’s all about worries about Delta (variant) starting to bleed into the economy and that is what is weighing on the dollar. The market is revising downward their estimates for nonfarm payrolls on Friday in the wake of some of the data we have seen this week, so we will have to see," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington DC.

"Certainly the recovery has been uneven but if nonfarm payrolls should also disappoint, that would seemingly close the door to an imminent taper and keep the dollar in a bit of a funk."

The dollar has been on the defensive since Fed Chair Jerome Powell said at the Jackson Hole conference on Friday that tapering could begin this year, but the central bank was in no hurry to raise interest rates. nL1N2PY1FI

Concerns about rising COVID-19 cases denting the economic rebound could also serve to keep the central bank's stance on the dovish side.

Other data showed U.S. manufacturing activity increased more than anticipated in August, but a measure of employment in factories fell to a nine-month low. nN9N2NL018

The dollar index =USD fell 0.219%.

The euro, meanwhile, rose against the greenback to a fresh one-month high as inflation worries persisted following data on Tuesday which showed euro zone inflation increased to 3% year-on-year in August, the highest in a decade and above the European Central Bank's 2% target, as well as the 2.7% Reuters forecast. nL1N2Q20QH

The euro EUR= was up 0.32% to $1.1845, its highest level since Aug. 5.

German Bundesbank President Jens Weidmann said on Wednesday euro zone inflation is at risk of overshooting the ECB's projections and the central bank should also prepare for the end of its 1.85 trillion euro Pandemic Emergency Purchase Program (PEPP). nF9N2N601N

The ECB is scheduled to hold a policy meeting on Sept. 9.

The Japanese yen strengthened 0.01% versus the greenback at 110.02 per dollar, while sterling GBP= was last trading at $1.3783, up 0.21% on the day.

========================================================

Currency bid prices at 10:41AM (1441 GMT)

Description

RIC

Last

U.S. Close
Previous
Session

Pct Change

YTD Pct
Change

High Bid

Low Bid

Dollar index

=USD

92.4440

92.6620

-0.22%

2.737%

+92.7900

+92.4140

Euro/Dollar

EUR=EBS

$1.1847

$1.1809

+0.32%

-3.04%

+$1.1849

+$1.1794

Dollar/Yen

JPY=EBS

110.0200

109.9950

+0.02%

+6.48%

+110.4150

+109.8800

Euro/Yen

EURJPY=

130.32

129.88

+0.34%

+2.68%

+130.4400

+129.8900

Dollar/Swiss

CHF=EBS

0.9148

0.9153

-0.04%

+3.41%

+0.9189

+0.9146

Sterling/Dollar

GBP=D3

$1.3783

$1.3756

+0.22%

+0.91%

+$1.3797

+$1.3732

Dollar/Canadian

CAD=D3

1.2624

1.2614

+0.10%

-0.85%

+1.2637

+1.2581

Aussie/Dollar

AUD=D3

$0.7368

$0.7314

+0.74%

-4.22%

+$0.7373

+$0.7308

Euro/Swiss

EURCHF=

1.0836

1.0806

+0.28%

+0.27%

+1.0850

+1.0807

Euro/Sterling

EURGBP=

0.8593

0.8582

+0.13%

-3.85%

+0.8595

+0.8574

NZ Dollar/Dollar

NZD=D3

$0.7067

$0.7050

+0.26%

-1.57%

+$0.7071

+$0.7034

Dollar/Norway

NOK=D3

8.6815

8.6915

-0.24%

+0.98%

+8.7100

+8.6690

Euro/Norway

EURNOK=

10.2855

10.2636

+0.21%

-1.73%

+10.2888

+10.2460

Dollar/Sweden

SEK=

8.6057

8.6237

+0.09%

+4.99%

+8.6465

+8.6048

Euro/Sweden

EURSEK=

10.1961

10.1870

+0.09%

+1.19%

+10.2070

+10.1825








(Reporting by Chuck Mikolajczak
Editing by Mark Heinrich)

((charles.mikolajczak@tr.com; @ChuckMik;))