By Yasin Ebrahim
Invesing.com – The dollar climbed on Wednesday as firmer services and private labor market data suggested the underlying U.S. economy remained on solid footing.
The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose by 0.28% to 98.09.
ISM non-manufacturing data for January showed an uptick to 55.5, beating expectations of 55.
The services sector is a critical component of the U.S. economy, accounting for roughly 80% of U.S. private-sector gross domestic product (GDP).
On the labor market front, private payrolls grew by 291,000 last month, a sharp increase from the 199,000 in December, according to a report released Wednesday by ADP (NASDAQ:ADP) and Moody's Analytics. That beat the economists' forecast of 156,000.
The bullish labor market data - just days ahead of the all-important nonfarm payrolls print due Friday - underpinned investor hopes that the economy will remain resilient despite the threat to global growth from a coronavirus-led slowdown in China.
Safe-haven demand remained on the back foot, pressuring the yen and Swiss franc as fears about the impact of the coronavirus eased despite the death toll in China rising to 493 so far and 25,000 infected.
USD/JPY rose 0.19% to Y109.72 and USD/CHF gained 0.39% to 0.9728.
GBP/USD fell 0.20% $1.3004 as Brexit concerns remerged following reports that the EU, as part of upcoming trade talks, could strip concessions it granted to U.K. investment firms -- a potential move that would hurt Britain's economically important financial sector.
The EU reportedly is considering amending a regulation known as MIFID II, which governs how countries outside the EU sell financial services to customers within the economic bloc.
EUR/USD fell 0.30% to $1.1003.
USD/CAD fell 0.18% to C$1.3295 but gains were kept in check as a surge in oil prices underpinned the loonie.
Oil prices jumped sharply as better-than-expected crude inventory numbers offset a larger build in weekly crude supplies. Crude prices were also supported by hopes that OPEC and its allies will agree to rein in production further in an effort to curb the expected impact of the coronavirus on oil demand.