Dollar Higher Amid Strong ADP Data, US Rating Downgrade

(RTTNews) - The U.S. dollar advanced against its major counterparts in the European session on Wednesday, as the nation's private sector employment jumped much more than expected in July and Fitch's downgrade of the credit rating dampened risk sentiment.

Data from payroll processor ADP showed that private sector employment shot up by 324,000 jobs in July after surging by a downwardly revised 455,000 jobs in June.

Economists had expected private sector employment to increase by 189,000 jobs compared to the spike of 497,000 jobs originally reported for the previous month.

European stocks fell sharply as Fitch lowered the U.S. debt rating to 'AA+' from 'AAA', pointing to a steady deterioration in standards of governance.

The rating agency said the downgrade reflected the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the repeated debt limit impasses.

The greenback touched 0.8803 against the franc, setting a fresh 3-week high. On the upside, 0.90 is seen as its next resistance level.

The greenback advanced to more than a 2-month high of 0.6553 against the aussie, near 5-week high of 0.6088 against the kiwi and near a 4-week high of 1.3337 against the loonie, off its early lows of 0.6629, 0.6169 and 1.3261, respectively. The currency is seen facing resistance around 0.64 against the aussie, 0.59 against the kiwi and 1.37 against the loonie.

The greenback rebounded to 143.46 against the yen, from an early low of 142.22. If the greenback extends rise, 145.00 is possibly seen as its next resistance level.

The greenback climbed to near a 4-week high of 1.2700 against the pound and a 5-day high of 1.0950 against the euro, reversing from an early low of 1.2805 and a 2-day low of 1.1019, respectively. The currency may challenge resistance around 1.24 against the pound and 1.08 against the euro.