CURRENCIES: Dollar Holds On To Gains As Trump Stumps For Business Tax Cuts
Euro rally loses steam
The dollar on Wednesday held on to its rebound against major rivals, helped in part by stronger-than-expected data on private-sector employment and revised second-quarter gross domestic product figures, as well as by the euro catching its breath after a strong advance.
The ICE U.S. Dollar Index , which measures the currency against a half-dozen rivals, rose to 92.8860, up from 92.26 late Tuesday in New York. The gauge on Tuesday fell to its lowest point in more than 2 1/2 years after North Korea launched a ballistic missile over Japan, but it then erased early losses and finished little changed for the session (http://www.marketwatch.com/story/dollar-dives-to-lowest-since-early-2015-rattled-by-north-korea-missile-launch-2017-08-29).
The index rose to an intraday high of 92.944 shortly before President Donald Trump took the stage in Springfield, Mo., to talk about his tax reform plans (http://blogs.marketwatch.com/capitolreport/2017/08/30/live-blog-and-video-of-president-donald-trumps-tax-reform-speech/?mod=MW_story_latest_news), but then retreated. Trump highlighted international competitiveness and a call for a 15% corporate tax rate.
The euro fell to $1.1893 on Wednesday, down from $1.1974 late Tuesday in New York, after it broke through the psychologically important $1.20 barrier early in the Tuesday session, which triggered some profit-taking that in turn pushed the euro lower, market participants said.
The shared currency "seems to be getting altitude sickness above $1.20," said Neil Wilson, senior market analyst at ETX Capital, in a note Wednesday, referring to the euro failing to hold above that key level. "Buying pressure could be on the wane with net long speculative positions drying up."
But Wilson also said the euro rally "could carry on, with inflation and growth looking exceedingly promising."
Another indicator for the slowing euro rally is the weakness in the euro-sterling cross , which is down to GBP0.9205 compared with GBP0.927 late on Tuesday, market participants said.
See:Here's what propelled the euro above $1.20 (http://www.marketwatch.com/story/heres-whats-driving-a-resurgent-euro-rally-2017-08-28)
For the year, the dollar index is down about 9.5%, while the euro is up 14% against the buck.
ADP employment data for August estimated private-sector payrolls rose by 237,000 (http://www.marketwatch.com/story/private-sector-job-growth-surges-in-august-adp-says-2017-08-30) compared a consensus estimates of 185,000. ADP data is watched for clues to the Labor Department's official jobs data, though its record as a guide is spotty. The Labor Department's September jobs report is set for release on Friday.
The Commerce Department raised its estimate of second-quarter GDP growth (http://www.marketwatch.com/story/us-economic-growth-hits-3-rate-in-second-quarter-2017-08-30) to an annual rate of 3% from 2.6% previously, beating a 2.8% median forecast. The big next data point to watch this week will be nonfarm payrolls on Friday.
Traders on Wednesday continue to monitor the fallout from North Korea's latest missile launch and Hurricane Harvey.
In other currencies trading on Wednesday, the dollar rose to Yen110.32 against the yen , up from Yen109.75 late Tuesday, while the British pound changed hands at $1.2920, just above Tuesday's $1.2919.
(END) Dow Jones Newswires
August 30, 2017 15:53 ET (19:53 GMT)