The U.S.
dollar traded higher against the most major currencies after the strong ISM non-manufacturing
index for the U.S. he Institute of Supply Management released its
non-manufacturing index today. The index increased to 56.3 in May from 55.2 in
April, exceeding expectations for a rise to 55.6.
According
to the U.S. ADP employment report, private sector employment increased by
179,000 jobs for May, missing expectations for a gain by 217,000 jobs. April's
figure was revised down to an increase of 215,000 from a rise of 220,000.
The U.S.
trade deficit increased 6.9% to $47.2 billion in April, from a deficit of 44.18
in March. That was the largest figure since April 2012. March’s figure was
revised down to a deficit of $44.18 billion from -40.40 billion U.S. dollar.
The Federal
Reserve will release its Beige Book later in the day.
The euro traded
mixed against the U.S. dollar. Eurozone’s services purchase managers’ index
(PMI) declined to 53.2 in May from 53.5 in April. Analysts had expected that
the index remains unchanged.
Eurozone’s
gross domestic product remained unchanged at 0.2% in the first quarter, meeting
analysts’ expectation.
Eurozone’s
producer price index fell 0.1% in April, after a 0.2% decline in March. This
figure was expected by analysts.
German
final services PMI declined to 56.0 in May from 56.4 in April. Analysts had
expected that the index remains unchanged.
French
final services PMI sank to 49.1 in May from 49.2 in April. Analysts had
expected that the index remains unchanged.
Market
participants expect the European Central Bank will add further stimulus
measures on Thursday. Investors are awaiting the ECB will cut interest rates
and announce measures to boost lending to smaller businesses.
The British
pound increased against the U.S. dollar due to the better-than-expected
services PMI. The U.K. services purchasing managers' index declined to 58.6 in
May, from 58.7 in April, but exceeding analysts’ expectations for a decline to
58.3.
The
Canadian dollar declined against the U.S. dollar due to the weak Canadian trade
balance data and the Bank of Canada’s interest rate decision. The Canadian
trade deficit was $0.64 billion in April, after a surplus of C$0.77 billion in
March. March’s figure was revised down from a surplus of C$0.80 billion. Analysts
had expected the trade surplus to fall to C$0.10 billion.
The Bank of
Canada (BoC) kept its interest rate unchanged at 1.00%. Monetary policy makers
said that there are the risks posed by slow inflation remain. The BoC pointed
out that the current monetary policy is appropriate and the timing and
direction of the next change to the interest rate will be determined by future
economic data.
The New
Zealand dollar hits 3-month lows against the U.S dollar following a decline in
dairy prices. Dairy product prices dropped 4.2% to the lowest level since
February 2013. Whole milk powder prices slid 8.5%, extending their drop since a
February 5, 2014 auction to 28%.
No economic
data was published in New Zealand.
The
Australian dollar climbed against the U.S. dollar due to strong economic growth
in Australia, but lost a part of its gains. The Australian gross domestic
product rose 1.1% in the first quarter, exceeding expectations of a 0.9% gain,
after a 0.8% increase the previous quarter.
On a yearly
basis, the gross domestic product in Australia increased 3.5% in the first
quarter, after a 2.8% rise the previous quarter.
The AIG
services index for Australia climbed to 49.9 in May from 48.6 in April.
The
Japanese yen traded mixed against the U.S. dollar in the absence of any major
economic reports in Japan.
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