Dollar Declines As Weak Data Reduces Rate Concerns
November 01 2023 - 9:09AM
RTTF2
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.
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