Dollar Dips as ADP Employment Shrinks Unexpectedly
The dollar initially fell after payrolls at US companies unexpectedly dropped in September, pushing traders to add to bets that the Federal Reserve will cut interest rates twice this year, before going on to erase nearly all of the loss. The loonie lagged peers in the Group of 10.
The Bloomberg Dollar Spot Index traded less than 0.1% lower, after falling as much as 0.3% earlier in the session. It is a fourth day of declines and the longest losing streak in a month
The US Supreme Court’s refusal to allow President Donald Trump to immediately oust Federal Reserve Governor Lisa Cook has eased pressure on the central bank
Much will depend on Trump’s choice to replace Jerome Powell, whose term as Fed chair ends in May, and whether the White House pursues other avenues to exert its influence over policymakers
“The market appears to have interpreted the Fed securing its independence as positive” for the dollar, according to Yusuke Miyairi, a foreign-exchange strategist at Nomura.
Private-sector payrolls decreased by 32,000 after a revised 3,000 decline a month earlier, according to ADP Research data released Wednesday. The median estimate in a Bloomberg survey of economists called for a 51,000 gain
The US government shutdown has started and risks delaying key economic reports
USD/CAD rose 0.2% to 1.3944
The Bank of Canada considered holding interest rates steady in September amid trade uncertainty and stronger consumption, but opted to cut given signs of a weakening economy and tamer core inflation, according to a summary of deliberations released Wednesday by the central bank
USD/JPY fell 0.5% to 147.10
Confidence among Japan’s large manufacturers improved for a second straight quarter, supporting the case for the Bank of Japan to raise interest rates as early as this month
EUR/USD little changed at 1.1730
Euro-area inflation accelerated in September, cementing the ECB’s plans to keep interest rates steady for now.
Source : Bloomberg.com
