Dollar Loses Ground Against Major Counterparts

(RTTNews) - The U.S. dollar drifted lower against its major counterparts on Wednesday with traders digesting a report on U.S. service sector growth.

The report from the Institute for Supply Management showed the pace of U.S. service sector growth slowed down in the month of March.

The ISM said its services PMI dipped to 51.4 in March from 52.6 in February. While a reading above 50 still indicates growth in the sector, economists had expected the index to inch up to 52.7.

Notably, the report also showed a substantial slowdown in the pace of price growth in the sector, with the prices index tumbling to 53.4 in March from 58.6 in February. The index fell to its lowest level since March 2020.

A report from payroll processor ADP showed stronger than expected private sector job growth in the U.S. in the month of March.

ADP said private sector employment jumped by 184,000 jobs in March after climbing by an upwardly revised 155,000 jobs in February. Economists had expected private sector employment to increase by 148,000 jobs compared to the addition of 140,000 jobs originally reported for the previous month.

Meanwhile, Fed Chair Jerome Powell reiterated during remarks at Stanford University that the central bank is not in a hurry to begin lowering interest rates.

Powell pointed to higher inflation data over January and February as a reason for the Fed to be cautious but acknowledged it is "too soon to say whether the recent readings represent more than just a bump."

"We do not expect that it will be appropriate to lower our policy rate until we have greater confidence that inflation is moving sustainably down toward 2 percent," Powell said.

He added, "Given the strength of the economy and progress on inflation so far, we have time to let the incoming data guide our decisions on policy."

The dollar index dropped to 104.23 from the previous close of 104.82.

Against the Euro, the dollar weakened to 1.0836 from 1.0770. The dollar dropped to 1.2653 against Pound Sterling, giving up about 0.6% from Tuesday's close of 1.2577 a unit of Sterling.

Against the Japanese currency, the dollar eased marginally to 151.66 yen. The dollar was roughly flat against the Aussie at 0.6562.

The Swiss franc Swiss franc firmed to 0.9029 from 0.9079 a dollar. Against the Loonie, the dollar was down at C$ 1.3528