The US dollar rose against most of its major peers and touched its highest level in five days against the euro on Wednesday. The greenback was stronger after private sector payroll data in the United States showed an increase that exceeded expectations.
The ADP Research Institute released its national employment report for February earlier today, which said that private sector hired 298,000 more employees in the last month. The increase compares to economistsâ predictions of a 190,000 gain. In January, the report said that the private sector hired 261,000 employees.
Most of the gain came from medium businesses, which hired as many as 122,000 new employees, while small businesses created 104,000 more jobs. Sector-wise, construction and business services added the most jobs, each hiring 66,000 new employees, while health services added 40,000 employees and manufacturing added another 32,000.
Investors are currently anticipating the European Central Bankâs meeting on Thursday, during which the bank will decide the monetary policy of the euro zone. The euro weakened against the US dollar as the market widely expects the European monetary policy to be kept unchanged despite increasing inflationary pressures.
The Federal Open Market Committee meets next Wednesday to decide the future of interest rates in the United States. The Federal Reserve will probably raise its Federal funds rate by a quarter of a point to adjust for rising prices. The CME Group FedWatch tool, which tracks bets investors take through Fed fund futures prices on monetary policy moves, shows a 86.4% chance of an interest rate hike.
EUR/USD traded at 1.0544 as of 18:20 GMT on Wednesday, from 1.0536 at 18:05 GMT, the pairâs lowest level since February 3. EUR/USD started the day at 1.0566.
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