04.12.201913:38:00UTC+00Dollar Falls As U.S. Private Sector Hiring Slows Sharply

The U.S. dollar drifted lower against its major counterparts in the European session on Wednesday, as private sector jobs rose much less than forecast in November, adding to worries about a slowdown in U.S. economy.

Data from payroll processor ADP showed that private sector employment increased by much less than anticipated in the month of November.

ADP said private sector employment rose by 67,000 jobs in November after climbing by a revised 121,000 jobs in October.

Economists had expected employment to jump by 140,000 jobs compared to the addition of 125,000 jobs originally reported for the previous month.

The data is seen as a precursor to the monthly non-farm payrolls report due out on Friday.

Economists expect the economy to have added 180,000 jobs in November, up from 128,000 jobs in October. The unemployment rate is expected to hold steady at 3.6 percent.

The Institute for Supply management's non-manufacturing PMI will be released at 10 am ET. The index is seen at 54.5 versus 54.7 in October.

At the same time, Federal Reserve Vice Chairman for Supervision Randal Quarles will speak about supervision and regulation before the House Financial Services Committee in Washington.

The currency held steady against its key counterparts in the previous session, except the yen.

The greenback depreciated to near a 2-week low of 1.1095 against the euro, from a high of 1.1067 recorded at 4:15 am ET. At yesterday's trading close, the pair was quoted at 1.1081. Extension of the greenback's downtrend may lead it to a support around the 1.12 region.

Final survey data from IHS Markit showed that the euro area private sector growth remained the lowest in six-and-a-half years in November, signaling modest expansion for the fourth quarter.

The composite output index held steady at 50.6 in November. The reading was slightly above the flash estimate of 50.3.

Extending its early decline, the greenback slid to 1.3105 against the pound, its lowest level since May 6. The pair was worth 1.2994 at Tuesday's close. The greenback may challenge support around the 1.34 mark.

Survey results from IHS Markit and Chartered Institute of Procurement & Supply showed that the UK service sector contracted the most in eight months in November but the pace of decline was slower than initially estimated.

The final services Purchasing Managers' Index fell to 49.3 in November from 50.0 in October. Although the reading was above the flash reading of 48.6, the index signaled the steepest drop since March.

The greenback pulled back to 0.9872 against the franc, not far from over a 4-week low of 0.9855 seen at 3:30 am ET. Should the greenback falls further, it is likely to test support around the 0.96 region.

The greenback eased off to 108.56 against the Japanese currency, heading towards nearly a 2-week low of 108.43 it recorded at 2:30 am ET. The greenback is seen facing support around the 106.00 mark.

The latest survey from Jibun Bank showed that Japan services sector moved back into expansion in November, albeit barely, with a PMI score of 50.3.

That's up from 49.8 and it moves back above the boom-or-bust line of 50 that separates expansion from contraction.

Following an advance to 0.6503 against the kiwi at 4:30 am ET, the greenback turned lower, touching a 4-month low of 0.6536. The greenback was trading at 0.6519 per kiwi at yesterday's close. Further downward trading may take the greenback to a support around the 0.68 area.

The USD/CAD pair logged a weekly low of 1.3266, compared to Tuesday's closing quote of 1.3295. The greenback is likely to face support around the 1.30 region, if it falls again.

After rising to a 2-day high of 0.6813 at 3:00 am ET, the greenback retraced its gains against the aussie, with the pair trading at 0.6846. The greenback is poised to test support around the 0.71 mark.

Looking ahead, the Bank of Canada's interest rate decision is scheduled for release at 10:00 am ET. Economists expect the benchmark rate to be kept unchanged at 1.75 percent.

Simultaneously, U.S. ISM services PMI for November will be featured.

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