The dollar strengthened against the euro and yen Wednesday after data from a prominent payrolls-processing firm showed private-sector employment expanded last month at a blistering pace.
Employers added 263,000 private-sector jobs in March, up from a revised 245,000 in February, ADP Inc. reported. That surpassed expectations for 170,000 new jobs, according to a survey of economists conducted by Econoday.
U.S. factories in particular helped contribute to the apparent rise in employment last month, according to a report from the Institute of Supply Management released earlier in the week. The report showed manufacturing-sector employment improved at its strongest pace since June 2011.
Investors are now turning their attention to a report on U.S. service-sector activity, expected at 10 a.m. Eastern on Wednesday. They’ll be paying close attention to an employment subcomponent. If that too surpasses expectations, economists will likely raise their forecasts for Friday’s labor report, said Christian Lawrence, a currency strategist at Rabobank. Minutes from the Fed’s latest policy meeting will also be released in the afternoon.
The dollar has been particularly sensitive to strong economic data in recent weeks, as investors are still trying to gauge exactly how many more rate hikes the Federal Reserve is planning in 2017.