Investing.com – The dollar advanced against a basket of major currencies on Thursday, as the pace of US private-sector jobs growth surged in May, fuelling expectations of a strong monthly non-farm payrolls reports on Friday, which lifted the possibility of a June rate hike to its highest level.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose by 0.25% to 97.15.
Private employers added 253,000 jobs in May, according to payroll processor ADP, well above Wall Street expectations of a 185,000 rise.
In separate report, U.S. manufacturing activity ticked higher, hitting 53.5 in May, the Institute for Supply Management (ISM) said on Thursday. Economists had expected a rise to 52.8.
A reading above 50 indicates that the manufacturing economy is generally expanding; below 50 indicates that it is generally contracting.
Meanwhile, spending in the construction sector fell 1.4% for the month, the biggest drop in a year, and below forecasts of a 0.2% decline.
Despite the dip in construction spending, expectations of a June rate hike rose to the highest level after the surge in private-sector jobs bolstered the prospect of a strong nonfarm payrolls report.
The nonfarm payrolls report on Friday, is expected to show that the U.S. economy created 185,000 jobs last month, and will be closely watched as it is the final jobs report before the Federal Reserve Open Market Committee (FOMC) meets in June.
According to investing.com’s Fed rate monitor tool nearly 90% of traders expect the Fed to hike its benchmark rate in June from 0.75-1% to 1-1.25%.
GBP/USD continued to ebb and flow with the release of various polls on the status of the current race for No 10, dipping to $1.2883, down 0.01%, after a poll, commission by The Times showed that Theresa May’s Conservative party lead has slipped to 42 points not far ahead of Labour on 39 points.
EUR/USD fell 0.30% to $1.1210 while EUR/GBP lost 0.30% to 0.8698.
USD/JPY tacked on 0.54% to Y111.38, while USD/CAD traded flat at $1.3502.