The dollar is up against the Euro and the Japanese Yen Wednesday afternoon, but is down slightly against the British pound. Concerns over the Italian budget have eased after the Italian newspaper Corriere della Sera reported that the government estimates a budget deficit of 2.4 percent of GDP for 2019, and then slash it to 2.2 percent for 2020.
Meanwhile, U.S. private sector employment came in better than expected this morning, ahead of Friday’s all important U.S. jobs report.
Reflecting strong job growth in both the goods-producing and service-providing sectors, payroll processor ADP released a report on Wednesday showing a much bigger than expected increase in U.S. private sector employment in the month of September.
ADP said private sector employment jumped by 230,000 jobs in September after climbing by an upwardly revised 168,000 jobs in August.
Economists had expected employment to increase by about 185,000 jobs compared to the addition of 163,000 jobs originally reported for the previous month.
Growth in U.S. service sector activity unexpectedly accelerated in the month of September, according to a report released by the Institute for Supply Management on Wednesday.
The ISM said its non-manufacturing index climbed to 61.6 in September from 58.5 in August, with a reading above 50 indicating growth in the service sector. Economists had expected the index to dip to 58.0.
The dollar slid to an early low of $1.1593 against the Euro Wednesday, but has since rebounded to around $1.1520.
The euro area private sector expanded at the slowest pace in four months in September on weak manufacturing activity, survey data from IHS Markit showed Wednesday. The final composite output index dropped to 54.1 in September from 54.5 in August and slightly below the flash estimate of 54.2.
Eurozone retail sales dropped unexpectedly in August reflecting the weakness in food turnover, figures from Eurostat revealed Wednesday. Retail sales decreased 0.2 percent month-on-month, following a 0.6 percent drop in July. Economists had forecast a 0.2 percent increase for August. This was the second consecutive fall in sales.
The buck fell to a low of $1.3022 against the pound sterling Wednesday morning, but has since bounced back to around $1.2985.
British service sector growth remained strong in September, but the pace of expansion eased moderately since August, survey data from IHS Markit showed Wednesday. The IHS Markit/Chartered Institute of Procurement & Supply services Purchasing Managers’ Index dropped to 53.9 in September from 54.3 in August. The score was also below the forecast of 54.0.
UK shop prices increased for the second consecutive month in September after five years of deflation, data from British Retail Consortium showed Wednesday. The shop price index climbed 0.2 percent year-on-year in September, following a 0.1 percent rise in August.
The greenback has jumped to an 11-month high of Y114.400 against the Japanese Yen this afternoon, from an early low of Y113.521.
The services sector in Japan continued to expand in September, but at a sharply slower pace, the latest survey from Nikkei revealed on Friday with a two-year low services PMI score of 50.2. That’s down from 51.5 in August, although it remains barely above the boom-or-bust line of 50 that separates expansion from contraction.