Dollar Rebounds From Recent Losses, Gains Against Major Rivals

(RTTNews) - The U.S. dollar strengthened against its major counterparts on Wednesday amid fading hopes about a slowdown in the pace of Fed's monetary policy tightening.

The dollar had tumbled in recent sessions after weaker than expected manufacturing data and construction spending report raised hopes the Fed will be less hawkish in its policy stance.

The yield on long term U.S. 10-year Treasury note rose to 3.769%.

The Reserve Bank of New Zealand delivered a 50 basis point hike, dampening expectations for a softening of an aggressive stance by central banks.

San Francisco Federal Reserve Bank President Mary Daly said on Tuesday the U.S. central bank needs to deliver "further rate hikes" and then hold those restrictive policies in place until it's "truly done" on inflation.

In economic news today, the Institute for Supply Management released a report showing a modest slowdown in the pace of growth in U.S. service sector activity in the month of September.

The ISM said its services PMI edged down to 56.7 in September from 56.9 in August, although a reading above 50 still indicates growth in the sector. Economists had expected the index to dip to 56.0.

A report released by payroll processor ADP showed private sector employment in the U.S. increased by slightly more than expected in the month of September, surging by 208,000 jobs after climbing by an upwardly revised 185,000 jobs in August.

Economists had expected employment to jump by 200,000 jobs compared to the addition of 132,000 jobs originally reported for the previous month.

Data from the Commerce Department showed U.S. trade deficit narrowed to $67.4 billion in August from a revised $70.5 billion in July. Economists had expected the deficit to shrink to $68.0 billion from the $70.6 billion originally reported for the previous month.

The dollar index surged to 111.74 this morning and despite dropping to 111.19, is up more than 1% from the previous close.

Against the Euro, the dollar has firmed to 0.9886 from 0.9987.

The dollar is strong against Pound Sterling, gaining more than 1.3% at $1.1324.

Against the Japanese currency, the dollar is firm, fetching 144.62 yen a unit, compared with 144.14 yen on Tuesday.

The dollar is up slightly against the Aussie at $0.6497. Against Swiss franc, the dollar is up, fetching CHF 0.9829, compared to the previous close of CHF 0.9793. The dollar has firmed to C$1.3618, rising from C$1.3512.