MW: Dollar inches up as equities, data disappoints
By William L. Watts & Deborah Levine, MarketWatch
NEW YORK (MarketWatch) -- The U.S. dollar rose slightly versus the euro and other major currencies on Wednesday amid a decline in U.S. equities and a disappointing report on the U.S. services sector.
The dollar index (DXY 77.76, -0.01, -0.01%) , which tracks the U.S. unit against a trade-weighted basket of six major currencies, rose slightly to 77.759, from 77.720 in late North American trading on Tuesday.
The euro bought $1.4380, compared to $1.4399 late Tuesday.
The Institute for Supply Management's index on the services sector, unexpectedly fell to 46.4 in July. Economists surveyed by MarketWatch expected the index to rise to 48 from 47, with readings below 50 indicating contraction. See more on ISM.
"This puts a damper on the green shoots enthusiasts and emphasizes that the contraction has merely lessened," said T.J. Marta, chief strategist at Marta on the Markets.
A separate report showed factory orders unexpectedly rose by 0.4% in June.
Earlier, in what some consider a preview of the U.S. monthly payrolls report, ADP Employment Services said 371,000 U.S. private-sector jobs were lost in July, much fewer than the number lost in June. See more on ADP jobs data.
On Friday, the government will report on its estimate for nonfarm payrolls, with economists surveyed by MarketWatch looking for a loss of 275,000 jobs, which would be the fewest since August.
The dollar had gained ground versus the Japanese yen in overseas trading as traders focused on the direction of equity markets.
The dollar's inverse relationship with investors' appetite for risky assets has reasserted itself in recent weeks, strategists said, with the dollar losing ground as equities posted a strong global rally and investors rushed into assets perceived as more risky. Reduced risk appetite has tended to support the dollar.
One dollar bought 95.01 yen, little changed from 95.25 yen on Tuesday.
The British pound gained slightly to $1.6963, after earlier topping $1.70. A raft of favorable economic data, including a 1.1% monthly rise in the July Halifax house price index and an unexpectedly strong jump in the July CIPS/Markit services purchasing managers index boosted the currency.
