MW: Dollar falls further as ISM, ADP revives risk appetite
Aussie boosted by strong second-quarter Australian growth
By William L. Watts and Lisa Twaronite, MarketWatch
NEW YORK (MarketWatch) -- The U.S. dollar extended losses on Wednesday after a measure of U.S. manufacturing activity unexpectedly improved last month, adding to evidence of pockets of strength in the economy.
The dollar and Japanese yen were under pressure from an earlier U.S. report on employment and a round of stronger Chinese and Australian economic data revived appetite for risky assets and crimped safe-haven flows into the currencies.
The dollar index (DXY 82.40, -0.80, -0.96%) , a measure of the U.S. unit against a basket of currencies, fell 82.334, down from 83.097 in late North American Trading on Tuesday.
The euro (EURUSD 1.2825, +0.0140, +1.1037%) rose to $1.2834 from $1.2679 late Tuesday.
Against the yen -- which surged to a 15-year high against the greenback last week -- the dollar (USDYEN 84.4800, +0.3200, +0.3802%) advanced to ¥84.54, compared with ¥83.87 late Tuesday.
The British pound (GBPUSD 1.5463, +0.0113, +0.7362%) gained to $1.5469, up from $1.5352, recovering after trimming gains following a report showing U.K. manufacturing fell unexpectedly. Read about U.K. and euro-zone PMI data.
The Institute for Supply Management's index on U.S. manufacturing activity rose to 56.3 in August from 55.5 in July. Economists surveyed by MarketWatch expected the index to slide to 53.2.
Earlier, ADP said private U.S. companies cut 10,000 jobs in August, as analysts said it is unlikely to change expectations for Friday's nonfarm payrolls report.
The ADP data comes two days before the government's more closely-monitored nonfarm payrolls report, put out by the Labor Department's Bureau of Labor Statistics. Read about ADP.
"We regard the ADP August decrease in private sector payrolls as generally consistent with our expectations for a 50,000 increase in the BLS's measure for August private-sector payrolls," said Raymond Stone, founder and analyst at Stone & McCarthy Research Associates.
Earlier, a pair of Chinese purchasing managers indexes indicated expansion in manufacturing activity in August after readings in July pointed to contraction. Read about the China PMI data.
The euro extended gains after the August purchasing managers index for the manufacturing sector, compiled by Markit, slipped to a six-month low of 55.1 from 56.7 in July. A reading of more than 50 signals growth in activity, while a reading of less than 50 signals a contraction.
Australia dollar
The Australian dollar seized the Asian spotlight, posting strong gains after economic data showed that country's April-June growth beat forecasts. Read more on Australian GDP.
The Aussie rose 2.4% to 90.93 U.S. cents. The Australian currency is up 1.3% against the U.S. unit this year but has fallen 7.9% versus the yen.
