WASHINGTON (dpa-AFX) - The U.S. dollar drifted lower against some of the major currencies on Wednesday as risk sentiment in the market improved thanks to fairly encouraging economic data from the U.S., Europe and China.
However, continued worries about pace of global economic recovery due to sharp spikes in new coronavirus cases in several parts of the world, especially in the U.S., limited dollar's downside.
A report from the Institute for Supply Management showed U.S. manufacturing activity unexpectedly expanded in the month of June. The ISM said its purchasing managers index jumped to 52.6 in June from 43.1 in May, with a reading above 50 indicating an expansion in manufacturing activity.
Economists had expected the index to climb to 49.5, which have still indicated a modest contraction in manufacturing activity.
A separate report released by payroll processor ADP showed a significant increase in private sector employment in the month of June as well as a substantial upward revision to the data for May.
ADP said private sector employment jumped by 2.369 million jobs in June, which was below economist estimates for a spike of about 3.000 million jobs.
However, revised data showed private sector employment soared by 3.065 million jobs in May compared to the previously reported loss of 2.760 million jobs.
The dollar index slipped to a low of 97.03 after having advanced to 97.62 earlier in the day, and was last seen at 97.14, down 0.25% from previous close.
Meanwhile, the manufacturing sector in China continued to expand in June, and at a faster rate, the latest survey from Caixin showed on Wednesday with a manufacturing PMI core of 51.2. That's up from 50.7 in May and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.
Against the Euro, the dollar weakened to $1.1277 this morning, but has since recovered to $1.1252, limiting is loss to about 0.14%. Final survey data from IHS Markit showed the severe downturn in the euro area manufacturing sector continued to ease in June amid easing of restrictions related to coronavirus pandemic.
The final factory Purchasing Managers' Index rose to a four-month high of 47.4 in June from 39.4 in May and improved from a flash reading of 46.9. Nonetheless, the reading was below the neutral 50.
Against Pound Sterling, the dollar slipped to $1.2491 and is now at $1.2475, trailing Tuesday's close by about 0.6%. IHS Markit showed the UK manufacturing sector showed signs of stabilizing in June, following the steep downturn caused by the coronavirus, or Covid-19, pandemic. The Chartered Institute of Procurement & Supply/ IHS Markit manufacturing Purchasing Managers' Index rose sharply to 50.1 in June from 40.7 in May. The reading came in line with the flash estimate.
The Japanese Yen firmed up to 107.45 a dollar, gaining from 107.93 yen a dollar.
Against the Aussie, the dollar slipped to 0.6944 before regaining some lost ground. It was last seen hovering around 0.6915, down 0.16% from Tuesday's close.
The Loonie was losing ground against the greenback, trading at 1.3587 a dollar, falling 0.08%, while the Swiss franc was little changed at 0.9470 a dollar.
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