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Dollar Sees Another Bright Session

The U.S. dollar continued to exhibit strength against most of its peers on Wednesday, extending recent upswing, on the back of fairly upbeat economic data and on reports that some breakthroughs have been made in the development of treatments for the coronavirus.

Data from private payroll processor ADP showed much stronger than expected private sector job growth in the month of January.

ADP said private sector employment soared by 291,000 jobs in January after jumping by a revised 199,000 jobs in December.

Economists had expected employment to increase by about 156,000 jobs compared to the addition of 202,000 jobs originally reported for the previous month.

A report from the Institute for Supply Management (ISM) said its non-manufacturing index rose to 55.5 in January from a revised 54.9 in December, with a reading above 50 indicating service sector growth.

Economists had expected the non-manufacturing index to inch up to 55.1 from the 55.0 originally reported for the previous month.

Data from the Commerce Department showed that the U.S. trade deficit widened in the month of December.

The Commerce Department said the trade deficit widened to $48.9 billion in December from a revised $43.7 billion in November.

The dollar index rose to 98.32 and was last quoting at 98.28, up 0.32% from previous close.

Against the Euro, the dollar strengthened to $1.1000, gaining about 0.4% from Tuesday’s close.

The euro area private sector expanded at the strongest pace in five months in January, final survey data from IHS Markit showed. The final composite output index rose to 51.3 in January from 50.9 in December. According to flash estimate, the index score was unchanged at 50.9.

Eurozone retail sales declined more than expected in December on weak food and non-food product sales. Data from Eurostat revealed retail turnover declined 1.6% in December from November, when it was up 0.8%. Economists had forecast a 1.1% drop.

Against Pound Sterling. the dollar firmed up nearly 0.3% to $1.2996. The UK service sector rebounded at a faster-than-estimated pace in January driven by rising client demand after general election, final survey results from IHS Markit and Chartered Institute of Procurement & Supply showed.

The Japanese Yen weakened to 109.83 a dollar, from 109.52 a dollar on Tuesday.

The Loonie and Swiss Franc were weak, with the dollar at $1.3289 and 0.9737, respectively, against the two currencies.

Swiss consumer sentiment index rose to -9.4 in the first quarter from -10.3 in the preceding period, and this limited franc’s weakness.

The Aussie, however, was up at 0.6747 against the dollar.

A report from Reuters cites a Chinese TV report indicating a research team at Zhejiang University has found an effective drug to treat people with the new virus.

Sky News also reported that a leading British scientist has made a significant breakthrough in the race for a coronavirus vaccine by reducing a part of the normal development time from “two to three years to just fourteen days.”

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