Dollar mixed on U.S. economic data and Fed minutes

11:13, January 07, 2010      

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The dollar was mixed against major currencies on Wednesday amid a couple of mixed economic reports and minutes of the last monetary policy meeting of the U.S. Federal Reserve.

The Institute of Supply Management (ISM) reported that its ISM services industries edged up by 1.4 points in December, just above the threshold for growth. Index readings higher than 50 signal expansion, while levels below 50 indicate contraction.

U.S. services industries have been hovering near the breakeven point for about four months in a row. The biggest drag continues to be weak employment. The report is consistent with a "gradual, painfully slow recovery," said analysts of Nomura Economic research.

Employers in private sector cut 84,000 jobs in December, according to the payroll processor ADP. The result was close to consensus expectations and should not affect consensus forecasts for non farm payroll employment on Friday, analysts said. It was expected that non farm employment in December remained flat or fells lightly, with unemployment rate around 10 percent.

Minutes from the December meeting of Fed suggested policymakers of the U.S. central bank remain cautious about the economic outlook. Although some incoming data had been better than expected, members of the Federal Open Market Committee (FOMC) agreed that overall news had been "broadly in line with projections for moderate growth."

The weak labor market remained "an important concern" to FOMC members. Some members noted that the Fed may have to expand and extend asset purchases beyond the first quarter to provide more stimulus.

The euro bought 1.4415 dollars in late New York trading compared with 1.4369 dollars it bought late Tuesday. The pound fell to 1.5997 dollars from 1.6002 dollars.

The dollar fell to 1.0328 Canadian dollars from 1.0397 Canadian dollars, and rose to 92.40 Japanese yen from 91.74 Japanese yen. It fell to 1.0281 Swiss francs from 1.0336 Swiss francs.

Source: Xinhua
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