Despite not announcing a change in the interest rates on Wednesday, the dollar still rallied against a basket of other major currencies on the Federal Reserve comments on remaining open about raising interest rates next month.
Announcement from the Institute for Supply Management that its non-manufacturing purchasing managers index rose to 57.5 in April from having previously recorded an index rise of 55.2 in March beating expectations from economists of an index rise by 55.8 also sent the US dollar to rally on Wednesday.
Payroll processing firm ADP also stated that nonfarm private employment rose by 177,000 last April beating forecasts of an increase by 175,000. Meanwhile, the economy was able to report slightly lower numbers of 255,000 new jobs back in March lower than previous reports of an increase of 263,000.
Fed Open To June Interest Hike
Investors remained hopeful on Wednesday after the Federal Reserve announced that they are still open for a June interest rate hike. The markets initially expected the Fed to raise interest rates on Wednesday but have decided to hold due to the positive U.S. employment data.
According to the central bank, consumer spending remains high as business investments grow steady. The inflation rate has also been observed recently to be growing close to its target/
Other reports have also stated that the U.S. economic growth remains on track despite the recent decline in the greenback and due to the lack of growth in companies hiring workers within the country. All of which was largely overshadowed by the growing services sector.
The gains which were largely brought by the market relief on Emmanuel Macron’s victory against anti-euro candidate Marine Le Pen during the first round of the French presidential elections.
The EUR/USD pair declined by as much as 0.21% to $1.0907 as the euro remained vulnerable on the upcoming second round of the French elections this Sunday. The pair traded below 1.0890 breaking below the previous session’s low of 1.0880.
The U.S. dollar index was up by 0.% on Wednesday at 99.01 against six other major currencies.
The U.S. Dollar also pushed higher against the Canadian Dollar on Wednesday approaching a 15-month high on the release of an upbeat U.S. jobs data.
During early trading, the USD/CAD pair hit as high as 1.3740 before closing at 1.3730 recording an increase of 0.13%.