Investing.com - The dollar cooled its recent rally against most major currencies and traded mixed on Wednesday after data revealed U.S. factory floors may not be as bustling as markets once inspected.
In U.S. trading on Wednesday, EUR/USD was down 0.15% at 1.2611.
The dollar gave back gains against the euro and other currencies after the Institute of Supply Management reported that its manufacturing index fell to 56.6 in September from 59.0 in August. Economists had expected the index to decline less and come in at 58.5.
The employment sub-index slowed to 54.6 from 58.1 in the previous month, while the new orders sub-index fell to 60.0 from 66.7.
At the same time, separate data revealed that U.S. construction spending fell 0.8% in August to an annual rate of $960.96 billion. Analysts were expecting a decline of only 0.5%, and the day's data gave a few investors room to sell the greenback for profits.
The dollar has posted noteworthy gains in recent sessions on sentiments U.S. monetary policy will tighten while Europe and Japan remain loose.
Elsewhere on Wednesday, data showed that the U.S. private sector added more jobs than expected in September, which gave the greenback some support.
Payrolls processor ADP reported that the U.S. private sector added 213,000 jobs last month, just ahead of expectations for jobs growth of 210,000. The economy created 202,000 jobs in August.
The report came ahead of Friday’s government nonfarm payrolls report, which includes both public and private sector employment. The government report was expected to show that the U.S. economy added more than 200,000 jobs for a sixth successive month in August.
The euro, however, remained in negative territory due to soft inflation numbers released earlier this week.
Eurostat, the statistics arm of the European Union, reported Tuesday that the euro area's annual inflation rate fell to a five-year low of 0.3% in September from 0.4% in August.
Core inflation, which strips out food, energy, alcohol and tobacco costs, came in at 0.7%, down from 0.9% in August.
Slumping consumer prices fueled market expectations for the European Central Bank to implement fresh stimulus measures to stave off deflationary threats after the bank unexpectedly cut rates to record lows last month.
A separate report released earlier this week revealed that the euro zone’s unemployment rate was unchanged at 11.5% in August.
The dollar was down against the yen, with USD/JPY down 0.47% at 109.13, and up against the Swiss franc, with USD/CHF up 0.19% at 0.9568.
The greenback was up against the pound, with GBP/USD down 0.23% at 1.6176.
Markit research group reported earlier that its U.K. manufacturing purchasing managers' index fell to 51.6 in September from a 52.2 in August, whose figure was downwardly revised from a previously estimated reading of 52.5.
Analysts had expected the index to rise to 52.5, and the disappointing figure softened demand for sterling.
The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.21% at 1.1174, AUD/USD down 0.23% at 0.8728 and NZD/USD down 0.19% at 0.7794.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.02% at 86.05.
On Thursday, the U.S. is to publish the weekly report on initial jobless claims as well as data on factory orders.