2020.06.0320:56:00UTC+00Dollar Loses Ground Against Major Currencies As Risk Sentiment Improves

The U.S. Dollar was weak against major currencies on Wednesday amid improved risk sentiment after business reopened in several countries across the globe, raising hopes of a gradual economic recovery.

Positive services sector data from China and Europe, and a smaller than expected fall in private sector employment in the U.S. helped ease concerns a bit.

Data from payroll processor ADP showed that the pace of private sector job losses slowed much more than anticipated in the month of May.

ADP said private sector employment slumped by 2.76 million jobs in May after plummeting by a revised 19.557 million jobs in April.

Economists had expected employment to tumble by about 9.0 million jobs compared to 20.236 million job nosedive originally reported for the previous month.

The ISM said its non-manufacturing index rebounded to 45.4 in May after plunging to an eleven-year low of 41.8 in April.

A report from the Commerce Department showed another nosedive in factory orders in the month of April. The report said new orders plunged by 13% in the month, after plummeting by a revised 11% in March.

Economists had expected factory orders to tumble by 14% compared to the 10.3% slump originally reported for the previous month.

The drop in factory orders was due to a sharp 17.7% drop in durable goods orders.

The dollar index dropped to a near 3-month low to 97.29 earlier in the session, later edged up to 97.29, but was still notbly down from its previous close of 97.67.

Against the Euro, the dollar weakened to $1.1237, losing about 0.6%.

The Pound Sterling was stronger by about 0.22% with a unit of sterling fetching $1.2578, compared to $1.2550 on Tuesday.

Against the Japanese currency, the dollar firmed up to 108.93 yen, rising from 108.67 yen a dollar.

The Aussie was stronger at US$0.6922, firming up from US$0.6897.

Against Swiss Franc, the greenback was down marginally at CHF 0.9614. The Swiss GDP fell 2.6% sequentially in the first quarter, reversing a 0.3% rise in the fourth quarter, data from the State Secretariat for Economic Affairs, or SECO, showed Wednesday. Economists had forecast a 2% contraction.

Against the Loonie, the dollar was down with a unit fetching C$1.3498, compared with C$1.3519 on Tuesday.

The loonie was slightly up against the dollar after the Canadian central bank held its interest rate unchanged at 0.25%. Higher crude oil prices too supported the loonie.

The Canadian economy appeared to have avoided the most severe scenario presented in the bank's April Monetary Policy Report, the bank said in the accompanying statement.

"Decisive and targeted fiscal actions, combined with lower interest rates, are buffering the impact of the shutdown on disposable income and helping to lay the foundation for economic recovery," it said.

Although the outlook for the second half and beyond remained heavily clouded, the bank expects the economy to resume growth in the third quarter, it added.