Dollar falls after data disappoints; Trump calls for rate cut
The dollar fell across the board on Wednesday after weaker-than-expected U.S. private payrolls numbers highlighted continued easing in the labor market and data showed the U.S. services sector contracted for the first time in about a year in May.
U.S. private payrolls rose by only 37,000 jobs in May, far less than expected, after a downwardly revised 60,000 rise in April, the ADP National Employment Report showed on Wednesday.
Economists polled by Reuters had forecast private employment increasing 110,000 following a previously reported gain of 62,000 in April.
U.S. President Donald Trump reiterated his calls for Federal Reserve Chair Jerome Powell to lower interest rates following the data.
Separately, data showed the U.S. services sector contracted for the first time in nearly a year in May while businesses paid higher prices for inputs, a reminder that the economy remained in danger of a period of very slow growth and high inflation.
The dollar fell 0.7% to 142.89 Japanese yen. The euro rose 0.4% to $1.1414, ahead of the European Central Bank's decision on interest rates expected on Thursday. ,
Investors are awaiting Friday's monthly payrolls figures to gauge the state of the labor market, and remain focused on trade negotiations.
The Trump administration has given a Wednesday deadline for countries to submit their best offers on trade, the same day duties on imported steel and aluminium doubled.
Trump is also tipped by the White House to have a call this week with Chinese President Xi Jinping, after the two sides accused each other of violating the terms of an agreement last month to roll back some tariffs.
Trump posted on his social media platform on Wednesday that Xi was "tough" and "hard to make a deal with."
The dollar index , which measures the greenback against six major currencies, was 0.3% lower on the day at 98.838, not far from its late-April low of 97.923.
The Hong Kong dollar was at 7.847 per U.S. dollar, the closest it has been to 7.85 - the weak end of its trading band against the U.S. dollar - since August 2023, according to LSEG data.
Sterling was 0.2% higher at $1.35515. The UK and its metal exports are exempt from the increased U.S. duties, given Britain has a trade deal in place.
Traders were also monitoring developments in Japanese markets after sources told Reuters the Bank of Japan is considering slowing down the tapering in its bond purchases from next fiscal year onward.
Bitcoin, the world's largest cryptocurrency by market capitalization, was 0.7% lower at $105,064.
Source : Reuters
