FX:Dollar broadly higher as Fed easing expectations wane
Forexpros - The U.S. dollar was broadly higher against its global counterparts on Wednesday, as markets pared back expectations for a fresh round of easing by the Federal Reserve while concerns over the outlook for global growth weighed on risk appetite.
During European morning trade, the dollar was up against the euro, with EUR/USD shedding 0.40% to hit 1.3180.
In the euro zone, data showed that the bloc’s service sector contracted for the sixth time in seven months in March, increasing the likelihood that the economy has entered a technical recession.
The final euro zone services purchasing managers index rose to 49.2 in March, up from a preliminary estimate of 48.7.
The greenback was slightly higher against the pound, with GBP/USD slipping 0.12% to hit 1.5893.
The pound found support following a report showing that the U.K. service sector expanded more-than-forecast in March, adding to hopes that the economic recovery is gaining traction.
The services PMI rose to 55.3 last month, its highest level since January and up from a reading of 53.8 in February. Economists had forecast a decline to 53.5 last month.
The greenback was slightly lower against the yen but pushed higher against the Swiss franc, with USD/JPY sliding 0.14% to hit 82.69 and USD/CHF climbing 0.42% to hit 0.9135.
Elsewhere, the greenback was broadly higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD adding 0.20% to hit 0.9929, AUD/USD dropping 0.69% to hit 1.0258 and NZD/USD falling 0.69% to hit 0.8132.
Sentiment on the Australian dollar was hit after official data showed earlier that the country posted a trade deficit of AUD0.48 billion in February, disappointing expectations for a surplus of AUD1.12 billion and fuelling fears over an economic slowdown.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, rose 0.30% to hit 79.78.
Later in the day, the U.S. was to publish a report non-farm employment change, as well as data from the Institute of Supply Management on service sector growth. In addition, U.S. Treasury Secretary Timothy Geithner was due to speak.
