Dollar Extends Decline Against Pound After ADP Data

Brussels (Feb 4)  The US dollar extended its slide against the pound on Wednesday, after data showed that private sector jobs growth in the US fell short of expectations in January.

Report released by payroll processor ADP showed that private sector employment increased by 213,000 jobs in January following an upwardly revised increase of 253,000 jobs in December.

Economists had expected employment to climb by about 223,000 jobs compared to the addition of 241,000 jobs originally reported for the previous month.

Traders focus on ISM non-manufacturing figures due today and jobs data on Friday for further clues about the economic growth.

Disappointing factory orders data for December and easing concerns over Greek's bailout deal weighed on the dollar yesterday.

String of weak US data in recent days has pushed back expectations of the Federal Reserve's rate hike by June.

The greenback fell to nearly a 3-week low of 1.5249 against the pound, compared to Tuesday's closing value of 1.5164. The greenback is seen finding support around the 1.55 mark.

The greenback has been already under pressure against the pound following the release of strong  UK  services PMI.

Survey by  Markit  and  Chartered Institute of Purchasing & Supply  showed that  UK  services Purchasing Managers' Index rose to 57.2 in January from 55.8 in December. The score was forecast to rise to 56.3.

The greenback, which closed yesterday's trading at 1.1475 against the euro, climbed to 1.1429. The next possible resistance for the greenback is seen around the 1.10 zone.

Data from the Eurostat showed that the Eurozone private sector activity expanded in January at the fastest pace since July.

The final composite output index rose to 52.6 in January from 51.4 in December. It was also above the flash reading of 52.2.

The greenback eased from an early 5-high of 117.99 against the yen, but has since stabilised thereafter. The pair was trading around yesterday's closing quote of 117.54.

Survey from Markit Economics showed that  Japan's  services sector continued to expand in January, albeit at a slightly slower pace, with a PMI score of 51.3.

That's down from 51.7 in December, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

The greenback advanced to 0.9278 against the franc in European morning deals and has consolidated shortly afterwards. The greenback-franc pair was valued at 0.9231 at yesterday's close.

Source: AllianceNews