U.S. Dollar Rebounds After Solid ADP Data
May 03 2023 - 06:23AM
RTTF2
The U.S. dollar erased some of its losses against its most major
counterparts in the European session on Wednesday, after a data
showed that the nation's private sector employment increased much
more than expected in April.
Data from payroll processor ADP showed that private sector
employment surged by 296,000 jobs in April after climbing by a
revised 142,000 jobs in March.
Economists had expected private sector employment to advance by
148,000 jobs compared to the addition of 145,000 jobs originally
reported for the previous month.
However, gains were limited as investors looked ahead to the
Federal Reserve's rate decision for signals on pause in the rate
hike after the widely expected 25-basis point move later in the
day.
The Fed will announce its rate decision at 2 pm ET, with
economists expecting a rate hike of 25 basis points for a third
consecutive meeting.
All eyes are on Fed chief Jerome Powell's news conference for
more clues about the policy outlook.
The greenback recovered to 1.2485 against the pound, 1.1021
against the euro and 0.8906 against the franc, off its early 2-day
low of 1.2533, 6-day low of 1.1046 and a 1-week low of 0.8871,
respectively. The greenback may find resistance around 1.21 against
the pound, 1.07 against the euro and 0.92 against the franc.
The greenback was up against the loonie, at a 5-day high of
1.3639. Should the currency strengthens further, it is likely to
test resistance around the 1.38 level.
The greenback rebounded to 0.6649 against the aussie and 0.6217
against the kiwi, from an early low of 0.6676 and near a 3-week low
of 0.6249, respectively. Next immediate resistance for the currency
is seen around 0.63 against the aussie and 0.61 against the
kiwi.
In contrast, the greenback resumed decline against the yen,
touching a 5-day low of 135.32. If the greenback slides again, it
may find support around the 129.00 area.
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