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Forex - EUR/USD Strength Knocks Dollar; Fed Minutes Eyed

Published 2018-07-05, 12:53 p/m
© Reuters.
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Investing.com – The U.S. dollar moved off its lows against its rivals but remained under pressure amid mixed U.S. economic data, and a stronger euro ahead of the release of the Federal Reserve's minutes.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell by 0.11% to 94.09.

ISM nonmanufacturing data for June showed an uptick to 59.1, beating expectations of 58.3.

The services sector is a critical component of the US economy, accounting for roughly 80% of U.S. private-sector gross domestic product (GDP).

A duo of reports, meanwhile, showed a mixed backdrop for the U.S. labor market as private payrolls fell short of forecasts, while initial jobless claims were in-line.

Private payrolls grew by 177,000 for June, a decline from 189,000 in May, according to a report released Wednesday by ADP and Moody's Analytics. That missed a economists' forecast for an increase of 190,000.

The U.S. Department of Labor reported Thursday that initial jobless claims for the week ended June 30 came in at a seasonally adjusted 231,000.

The subdued post-holiday start for the greenback comes ahead of the minutes of Federal Reserve's June meeting due 2pm ET, expected to reveal clues on the central bank's monetary policy outlook.

A rising euro also added pressure on the greenback amid better-than-expected German factory orders, and signs that the U.S. was easing its tough stance on tariffs towards European Union carmakers.

The U.S. ambassador to Germany reportedly said that President Donald Trump would suspend threats to impose tariffs on cars imported from the EU if the bloc axed duties on U.S. cars.

EUR/USD rose 0.33% $1.16594.

The safe-haven yen and Swiss franc were out of favor, however, despite looming U.S. and China trade tariffs expected to take effect on Friday.

USD/JPY rose 0.12% to Y110.63, while USD/CHF rose 0.01% to 0.9929.

GBP/USD fell 0.08% to $1.3216 as fears the UK could leave the EU without a new trade deal continued to weigh on sentiment.

USD/CAD fell 0.14% C$1.3127 as a slip in crude oil prices, weighed on the loonie, following an unexpected build in domestic crude supplies.

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