US Dollar Index (DXY) Holds Steady Amid ADP, PMI Data

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The US dollar is trading relatively flat midweek, joining the seesaw in the broader financial markets. The greenback erased most of its overnight losses, climbing to as high as 91.00 before paring some of its gains. The buck has been trading higher in 2021 as it has rallied more than 1%, defying the market expectations of a weakened dollar amid the post-coronavirus economic recovery.

Economic data has been in focus in the middle of the trading week following the volatile performance in the equities arena.

ADP numbers suggest that private payrolls increased by 117,000 in February, falling short of the market forecast of 177,000. This is down from the 195,000 new jobs in January, with losses in the information, goods-producing, manufacturing, mining, and construction sectors. The job gains were led by mid-sized companies, adding 52,000 new positions.

On Friday, the US government will publish the February employment report, forecasting 182,000 new jobs and an unemployment rate of 6.3%.

The IHS Markit composite purchasing managers’ index (PMI) came in at 59.5 last month, up from 58.7 in January – anything above 50 indicates expansion. The market had penciled in a slight boost to 58.8. The services PMI rose to 59.8 in February, up from 58.3 in January. Economists had forecast a reading of 58.8.

The Institute of Supply Management (ISM) non-manufacturing PMI slumped to 55.3 last month, down from 58.7 in January. Non-manufacturing new orders, business activity, and employment fell, while non-manufacturing prices surged month-over-month.

The US bond market was mostly in the green on Wednesday, with the benchmark 10-year Treasury yield rising 0.057% to 1.472%. The one-year bill edged up by 0.003% to 0.079%, while the 30-year bond jumped 0.028% to 2.243%.

The US Dollar Index (DXY), which measures the greenback against a basket of currencies, rose 0.08% to 90.86, from an opening of 90.79. The DXY climbed 0.76% over the last week.

The USD/CAD currency pair fell 0.13% to 1.2623, from an opening of 1.2632, at 17:51 GMT on Wednesday. The EUR/USD dropped 0.12% to 1.2076, from an opening of 1.2092.

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