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FX round-up: Dollar eases on soft ADP, ahead of ECB

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Date: Thursday 03 Jul 2008

LONDON (ShareCast) - The dollar eased against most major currencies as traders digested an ADP monthly jobs survey, which showed a fall of 79,000 in June, much higher than forecasts.

The survey, which is considered as an indicator of official non-farm payroll figures due Thursday, saw most of the losses in the manufacturing sector.

Jitters ahead of the European Central Bank’s decision on interest rates also weighed on the US currency.

The ECB is widely expected to increase interest rates by 25 basis points to help control inflation and investors will be keeping a keen eye on the accompanying statement for clues on the future direction of interest rates.

There was also some caution ahead of a key unemployment report, due Thursday from the Department of Labor.

The euro was boosted by expectations of an ECB rate hike while sterling struggled following more warning signs about the state of the UK economy in the shape of a Marks & Spencer profit warning. Yet another gloomy report on the state of the housing market put further pressure on sterling.

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