Dollar gains on upbeat private-sector U.S. jobs report

Investing.com - Investing.com - The dollar traded largely higher against most major currencies on Wednesday after a private-sector jobs report came in much stronger than anticipated, boosting hopes official data will do likewise on Thursday.

In U.S. trading on Wednesday, EUR/USD was down 0.18% at 1.3655.

Payroll processor ADP reported earlier in its nonfarm payrolls report showed that the U.S private sector added 281,000 jobs last month, beating expectations for an increase of 200,000 and the highest since November 2012.

The upbeat data eased concerns that headwinds may be slowing U.S. recovery.

A separate report showed that U.S. factory orders fell by a larger than forecast 0.5% in May.

Elsewhere, Federal Reserve Chair Janet Yellen said earlier that the appetite for risk appears to be on the rise though the country's top economist sees no need to immediately alter today's accommodative U.S. monetary policy.

Corporate bond spreads have been falling as have volatility indicators such as the Volatility S&P 500, which may indicate investors are taking on risks despite the possibility of facing losses for which they might not be fully prepared, Yellen said in a speech at the International Monetary Fund.

Still, policy will remain accommodative, as Fed policies aren't a panacea to deal with financial risks.

The dollar, however, firmed anyway on sentiments that rates are set to rise next year regardless.

The dollar was up against the yen, with USD/JPY up 0.30% at 101.82, and up against the Swiss franc, with USD/CHF up 0.17% at 0.8892.

The greenback was down against the pound, with GBP/USD up 0.08% at 1.7164.

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.

The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.34% at 1.0669, AUD/USD down 0.61% at 0.9438 and NZD/USD down 0.03% at 0.8771.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.17% at 79.98.

On Thursday, the Institute for Supply Management will publish its report on U.S. service-sector activity on top of the widely-watched U.S. jobs report.

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