Greenback Broadly Weaker Against Major Currencies

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The U.S. Dollar went back into negative territory against major currencies after key data in the U.S. confirmed sluggish economic growth in the region. The greenback traded lower against both Euro and Yen during the late Asian hours.

Economic activity slides

EUR/USD was seen trading up by 0.20% at 1.1126 as the economic data signalled that the Federal Reserve might not be able to step-up rates as aggressively as it had announced earlier. The ADP Research Institute noted yesterday that the private payrolls grew by 205,000 in January, lower than the growth of 257,000 in December. However, the data came above the Street’s expectations, which estimated numbers to rise by 190,000. The report comes ahead of the official employment data to be released by the U.S. Department of Labor tomorrow. The market is expecting the government to report the addition of 190,000 jobs in January after 292,000 growth in December.

At the same time, the Institute for Supply Management (ISM) reported that the service sector activity slipped to 53.5 in January versus 55.8 in December, confirming the slowdown in the economy.

Other currencies

The Japanese Yen continued to gain against the greenback today as the weak European markets coupled with a dovish tone of the Fed has renewed demand for safe-haven assets. The currency appears to have brushed off the concerns stemmed from the Bank of Japan’s surprise move of embracing negative interest rates. USD/JPY traded down by 0.05% to 117.85 during today’s late Asian hours.

In the meantime, Chinese yuan remained weaker against the U.S. dollar after a report of a major currency transaction involving $43 billion bid by ChemChina for Swiss-based Syngenta. USD/CNY traded up by 0.01% to 6.5775.

The greenback remained low against the British Pound and Australian Dollar. GBP/USD traded up by 0.15% to 1.4623, while Australian dollar too gained as much as 0.40% at 0.7194. The U.S. Dollar index traded steeply lower by a whopping 0.21% to trade around 97.05.

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