Investing.com - The dollar held onto gains against the other major currencies on Wednesday, despite weak U.S. service sector data as an upbeat U.S. jobs report continued to support demand for the greenback.
The Institute of Supply Management said its non-manufacturing purchasing manager's index fell to 55.5 last month from 56.5 in June. Analysts had expected the index to drop to 56.0.
The data came after payroll processor ADP said the U.S. private sector added 179,000 jobs last month, surpassing expectations for an increase of 170,000.
The economy created 176,000 jobs in June, whose figure was revised from a previously reported increase of 172,000, the report said.
While not viewed as a reliable guide for the government jobs report due on Friday, August 5, it does give guidance on private-sector hiring.
The dollar has come under pressure amid diminished expectations for another rate hike by the Federal Reserve this year after last week’s surprisingly weak data on U.S. second quarter growth.
Earlier in the week, Dallas Fed head Robert Kaplan urged caution on raising U.S. interest rates again amid a raft of risks facing the global economy.
USD/JPY gained 0.56% to trade at 101.45, off Tuesday’s three-week low of 100.65.
Japan’s government on Monday approved a package of stimulus measures to spur economic growth, but investors fear the measures are not strong enough to stave off deflation.
The Bank of Japan held off implementing fresh stimulus measures last week, saying it would review monetary policy again in September.
EUR/USD dropped 0.50% to 1.1168, pulling away from Tuesday’s five-week peak of 1.1236.
The pound was also lower, with GBP/USD down 0.30% at 1.3316, while USD/CHF advanced 0.73% to 0.9714.
Research group Markit ealier said its U.K. services PMI dropped to 47.4 last month from a reading of 52.3 in June. It was the lowest level since December 2012.
The weak data added to expectations for a rate cut by the Bank of England’s at its policy meeting on Thursday.
The Australian and New Zealand dollars were weaker, with AUD/USD down -% at 0.7584 and with NZD/USD tumbling -% to 0.7179.
Elsewhere, USD/CAD slipped 0.18% to 1.3086.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.41% at 95.41, off the previous session’s six-week lows of 94.94.