Dollar Recovers After Setback, Posts Gains Against Some Counterparts

(RTTNews) - After holding firm in the European session, the U.S. dollar fell on Wednesday, weighed down by data showing a slowdown in service sector growth in the month of November.

The Institute for Supply Management's report showed that the services PMI dropped to 52.1 in November from 56.0 in October. Economists had expected the index to drop to 55.5.

A report from payroll processor ADP showed less than expected increase in U.S. private sector employment in the month of November. The report said private sector employment climbed by 146,000 jobs in November after jumping by a downwardly revised 184,000 jobs in October.

Economists had expected private sector employment to grow by 165,000 jobs compared to the surge of 233,000 jobs originally reported for the previous month.

The Commerce Department released a report showing a modest increase by new orders for U.S. manufactured goods in the month of October. The report said factory orders rose by 0.2% in October after dipping by a revised 0.2% in September. Economists had expected factory orders to rise by 0.2%.

Traders also noted Federal Reserve Chair Jerome Powell's speech at the New York Times DealBook Summit. Powel painted a rosy picture of the U.S. economy ahead of key jobs data due Friday. Powell stressed that the current state of the economy allows the Fed to exercise caution in moving rates back down to a more neutral level.

The dollar index, which fell to 106.09 from 106.72, recovered gradually and was last seen at 106.38, up slightly from the previous close.

Against the Euro, the dollar weakened to 1.0545 early on in the New York session, but recovered to 1.0513, gaining marginally. The dollar was down against Pound Sterling at 1.2699, despite firming from 1.2722.

The dollar strengthened to 0.6431 against the Aussie. Against Swiss franc, the dollar weakened to CHF 0.8845, and edged up to C$ 1.4076 against the Loonie.