The New Zealand dollar rose on Wednesday, boosted by a robust domestic jobs report, while the Australian dollar pushed higher as modest gains in oil prices bolstered risk appetite. New Zealand reported that the unemployment rate unexpectedly fell to 5.3% from 6% in three months to December. It was the lowest reading since March 2009.Economists had expected the jobless rate to tick up to 6.1%.
The pound rose to three week highs on Wednesday after data showing that the dominant U.K. service sector posted another solid rise in output in January, getting 2016 off to a strong start. The Markit services purchasing managers’ index ticked up to a five month high of 55.6 from Decembers 55.5. Analysts had expected a slight downtick to 55.3.
In the euro zone, data on Wednesday showed that business activity slowed to a four month low in January, adding to pressure on the European Central Bank to take fresh measures to shore up growth.
The composite euro area PMI, which measures manufacturing and service sector activity, slid to 53.6 in January from 54.3 in December. Another report showed that retail sales in the region rebounded in December, boosted by Christmas shopping
The dollar shrugged off a report by payrolls processor ADP showing that the U.S. private sector added 205,000 jobs last month, beating economists' forecasts for an increase of 195,000.
Markets use the ADP data as a guide for the Labor Department’s employment report, which will be released Friday and covers both government and private sector jobs growth.Economists expect Friday's report to show that the U.S. economy created 190,000 jobs last month, after an increase of 292,000 in December.
The dollar extended losses against the other major currencies on Wednesday after data showing that U.S. service sector activity slowed again in January prompted concerns that weakness in manufacturing may be spreading to other sectors.
The drop in the dollar came after the Institute for Supply Management said its non-manufacturing index declined to 53.5 from December's 55.3.
It was the lowest reading since February 2014 and was worse than expectations for a downtick to 55.1.
The report came after a separate survey by Markit also showing that U.S. service sector activity grew more slowly in January, indicating that the economy may be losing momentum.
Oil prices regained ground on Wednesday, bolstering the risk sensitive Canadian dollar, but gains looked likely to be held in check on persistent oversupply fears.
The loonie, as the Canadian dollar is also known, has rebounded against the greenback after falling to its weakest level since 2003 on January 20.
