U.S. Dollar Lower As Soft ADP Data Increases Odds Of Aggressive Rate Cut

(RTTNews) - The U.S. dollar fell against its most major counterparts in the New York session on Thursday, as private sector employment increased less than expected in August, increasing the chances of a 50 basis point rate cut by the Federal Reserve this month.

Data from payroll processor ADP showed that private sector employment rose by 99,000 jobs in August after climbing by a downwardly revised 111,000 jobs in July.

Economists had expected private sector employment to jump by 145,000 jobs compared to the addition of 122,000 jobs originally reported for the previous month.

The data is likely to add to recent concerns about the economic outlook but could also boost the chances of accelerated interest rate cuts by the Federal Reserve.

Meanwhile, the Labor Department released a separate report showing a modest decrease by first-time claims for U.S. unemployment benefits in the week ended August 31st.

The report said initial jobless claims dipped to 227,000, a decrease of 5,000 from the previous week's revised level of 232,000.

Economists had expected jobless claims to edge down to 230,000 from the 231,000 originally reported for the previous week.

The greenback declined to a 1-week low of 1.1119 against the euro and a 6-day low of 1.3179 against the pound, off its early highs of 1.1074 and 1.3136, respectively. The currency is likely to challenge support around 1.12 against the euro and 1.33 against the pound.

The greenback dropped to more than a 4-week low of 142.84 against the yen and a 2-day low of 0.6225 against the kiwi, from its early highs of 143.90 and 0.6178, respectively. The currency is seen finding support around 141.00 against the yen and 0.63 against the kiwi.

The greenback was lower against the loonie and the aussie and was trading at 1.3510 and 0.6730, respectively. Immediate support for the currency is seen around 1.32 against the loonie and 0.69 against the aussie.

Meanwhile, the greenback recovered to 0.8485 against the franc, from an early 1-week low of 0.8433. It is poised to challenge resistance around the 0.92 level.