Dollar Declines As Weak Data Reduces Rate Concerns

(RTTNews) - The U.S. dollar was lower against its most major counterparts in the New York session on Wednesday, as weaker-than-expected ADP private payrolls data and ISM manufacturing PMI for October eased concerns about the outlook for interest rates.

Data from payroll processor ADP showed that private sector employment in the U.S. increased less than expected in October.

ADP said private sector employment climbed by 113,000 jobs in October after rising by 89,000 jobs in September. Economists had expected employment to jump by 150,000 jobs.

Data from the Institute for Supply Management showed that manufacturing activity in the U.S. unexpectedly contracted at a faster rate in the month of October.

The ISM said its manufacturing PMI fell to 46.7 in October from 49.0 in September, with a reading below 50 indicating a contraction. Economists had expected the index to come in unchanged compared to the previous month.

The Federal Reserve is widely expected to keep interest rates unchanged at the end of its two-day meeting, but traders will pay close attention to the accompanying statement for clues about the outlook for rates.

CME Group's FedWatch Tool is currently indicating a 98.1 percent chance the Fed will leave rates unchanged today and a 78.7 percent chance rates will remain unchanged in December.

The greenback eased to 1.2164 against the pound and 1.0570 against the euro, from an early 2-day high of 1.2095 and a 6-day high of 1.0521, respectively. The greenback may locate support around 1.23 against the pound and 1.08 against the euro.

The greenback edged down to 150.81 against the yen and 1.3840 against the loonie, from its prior highs of 151.68 and 1.3892, respectively. The next possible support for the greenback is seen around 144.00 against the yen and 1.33 against the loonie.

The greenback fell to 0.6394 against the aussie and 0.5858 against the kiwi, off an early high of 0.6318 and a 6-day high of 0.5788, respectively. The greenback is seen finding support around 0.65 against the aussie and 0.60 against the kiwi.

In contrast, the greenback rebounded to 0.9104 against the franc, after falling to 0.9070 at 8:45 am ET. Next near term resistance for the currency is likely seen around the 0.92 level.

At 2:00 pm ET, the Federal Reserve is set to announce its rate decision. The central bank is widely expected to leave interest rates unchanged at 5.5 percent.