Investing.com – The dollar moved higher against a basket of other major currencies on Wednesday after data showed that the U.S. private sector added more jobs than expected in June.
The latest ADP nonfarm payrolls report showed that the U.S private sector added 281,000 jobs last month, outstripping expectations for an increase of 200,000 and the highest since November 2012.
The upbeat data eased concerns over the outlook for the U.S. recovery after data last week showing a sharp economic contraction in the first quarter underlined the view that the Federal Reserve would keep rates on hold for longer.
Investors were turning their attention to a speech by Fed Chair Janet Yellen later in the day, ahead of Thursday’s closely watched nonfarm payrolls report. The report was being released one day ahead of schedule because of Friday’s Independence Day holiday.
EUR/USD extended losses, falling 0.23% to 1.3648, off the previous session’s six-week high of 1.3699.
Sentiment on the euro was hit by concerns that the European Central Bank could voice concerns over the currency’s strength at its post-policy meeting press conference on Thursday, amid fears over persistently low levels of inflation in the euro zone.
GBP/USD eased to 1.7144 after touching highs of 1.7176 earlier, the most since October 2008.
Demand for sterling continued to be underpinned after data on Wednesday showed that the U.K. construction sector expanded at the fastest rate in four months in June.
The data added to indications that the economy continued to grow at a strong pace in the second quarter, fuelling expectations that the deepening recovery will prompt the Bank of England to raise interest rates before the end of 2014.
USD/JPY was up 0.18% to 101.69 from around 101.45 ahead of the employment data. Meanwhile, USD/CHF added 0.20% to trade at 0.8892.
The Australian dollar extended its pullback from Monday’s seven-month highs, with AUD/USD down 0.52% to 0.9446.
The Aussie turned lower after official data on Wednesday showed that the country’s trade deficit widened to its largest in almost one-and-a-half years in May, as the strong domestic dollar and lower commodity prices weighed on export earnings.
Elsewhere, NZD/USD was down 0.17% to 0.8759. The Canadian dollar remained supported close to its 2014 highs, with USD/CAD at 1.0640.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, rose 0.19% to 80.00, recovering from Tuesday’s two-month lows of 79.84.