Dollar Strengthens On Solid U.S. Data

 
   By James Ramage 
 

        The dollar rose against the euro and the yen on Wednesday, after better-than-expected U.S. jobs and manufacturing numbers signaled a strengthening economy.
        The greenback climbed 0.9% against the common currency, on pace to close at its strongest level in a month. One euro bought $1.1054 in late-afternoon trade.
        The dollar rose 0.6% against the yen to Y123.17. The Wall Street Journal Dollar Index, which measures the greenback against a basket of widely traded currencies, increased 0.7% to 87.18, its highest since June 5.
        On Wednesday, payroll processor ADP said factory payrolls increased by an estimated 7,000 jobs in June to 237,000, versus expectations of 220,000. The Labor Department will release the June employment report on Thursday. Economists predict the U.S. economy added 233,000 new jobs last month.
        Investors bought dollars in anticipation of a stronger jobs report, said Carl Forcheski, director of corporate FX sales at Societe Generale.
        "For now, the market's reacting more to improved economic prospects in the U.S. We're beginning to see economic indicators consolidate to firmer levels," Mr. Forcheski said. "Hopefully, we'll see confirmation of more wage growth in the nonfarm payrolls report."
        The dollar continued to rise against rivals on the back of stronger U.S. data, the latest sign that investors predict the U.S. economic recovery will spark a resumption in the greenback's ascent.
        Expectations for higher U.S. interest rates that had drawn investors to the dollar and driven it to multiyear highs against rivals flagged in March on signs that the economy had slowed. But improving data for May reignited hopes that the Federal Reserve would raise rates at least once before the end of 2015, a move many expect will draw investors from around the globe to U.S. assets at a time when risks abound.
        In addition, the Institute for Supply Management's manufacturing purchasing managers index rose to 53.5 in June from 52.8 in May, versus expectations of a rise to 53.2, signaling expansion in the sector. Within the numbers, the employment index rose to 55.5 last month from 51.7 in May, which augurs well for Thursday's payrolls report.
        Solid U.S. data overshadowed news from Greece and its debt crisis, which captured the market's attention over the weekend as negotiations between the country's government and its creditors took a tense turn. Earlier Wednesday, the euro slipped against the dollar as Greece defaulted on repaying $1.72 billion to the International Monetary Fund and as the country's new bailout proposal was rejected by its European creditors.
        Write to James Ramage at james.ramage@wsj.com
        (END) Dow Jones Newswires

        July 01, 2015 17:01 ET (21:01 GMT)

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