USD Falls on Soft ADP Payrolls

The dollar lost ground against the yen and euro on Thursday after U.S. unemployment data failed to reverse a downtrend that followed some of the biggest gains on record for China’s yuan.

A rise in overnight borrowing costs in Hong Kong and growth in China’s services sector to a 17-month high last month helped put the yuan on pace for the biggest two-day rise for the offshore version of its currency since its inception in 2010. CNH=

That in turn triggered a broader round of profit-taking on the dollar, sending it more than 1 percent lower against the yen and as low as $1.0575 per euro before a late-morning recovery in Europe. JPY= EUR=

U.S. jobless claims fell to a 43-year low last week, but that data was countered by a soft report from payrolls processor ADP showing employment gains were muted in December.

That put the dollar back on its lower trajectory after a brief stall following the release of the jobless claims figure.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza