The US dollar traded higher against a basket of its main counterparts on Wednesday as bullish economic data, which showed better conditions than expected in the labor market, raised optimism between traders. The greenback rose despite anticipation for a monetary policy decision that is due to be released later today.
ADP and Moody’s Analytics released a report on nonfarm employment in April at 12:15 GMT today. The report said that employers in the United States hired 177,000 workers last month, following a revised gain of 255,000 jobs in March. The number of new nonfarm jobs in April was 2,000 ahead of expectations, which reflected healthy conditions in the labor market.
Most of the employment gain came from midsized companies that hired 78,000 new employees in April, followed by small businesses, which had 61,000 new workers. The US private sector created 72,000 new professional and business positions and 41,000 education and health jobs last month, and hired 35,000 more employees in the hospitality industry.
The construction sector was the only sector to lose workers in April, however the 2,000 loss was mitigated by an 11,000 jobs gain in manufacturing and 3,000 new mining positions. Overall, the data revealed that the US labor market continued to be strong, which gave support to the US currency.
Further employment data was released in a report from the Institute for Supply Management at 14:00 GMT. The ISM nonmanufacturing employment index remained strong with a reading of 51.4 in April, despite a small 0.2 drop from Marchâs reading. Anticipation is now at its highest for the official US nonfarm payroll data from the Bureau of Labor Statistics on Friday, which is expected to show that the US economy created 185,000 new jobs in April.
The ISM report added that the ISM nonmanufacturing purchasing managersâ index, which is used as a gauge for business conditions, rose to 57.5 in April from 55.2 in March, beating estimates of 55.8. The new orders subindex also climbed to 63.2 last month from 58.9 in the previous month, while the business activity subindex had a reading of 62.4, which was 3.5 higher than March.
EUR/USD traded at 1.0911 as of 17:45 GMT on Wednesday from 1.0907 at 09:15 GMT, the pairâs lowest level for the day. EUR/USD began trading today at 1.0934. GBP/USD was at 1.2907 from 1.2891 at 06:10 GMT, which was also the weakest level for the pair today. GBP/USD was at 1.2940 when todayâs trading began.
The Dollar Index, which measures the strength of the US currency against a basket of its major peers, was at 99.10 as of 17:39 GMT today, from 98.97 yesterday.
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