The greenback rallied broadly against major currencies after a report showed companies in the U.S. added 189,000 jobs in November, following a revised estimate of 119,000 in October. The factory orders quickened by 0.5% in October (forecast was no change) and the worker productivity also accelerated in the third quarter at an annual rate of 6.3%, the most since 2003.
The robust ADP employment data raised speculation that the non-farm payrolls data to be released on Dec. 7 may be stronger than the forecast of 75,000. U.S. employers added 166,000 jobs in October. The unemployment rate is forecast to increase to 4.8% from 4.7%.
U.S. currency rallied against the Japanese yen to 110.97 on Wednesday as interest rates futures showed a 38 percent chance of a half-percentage point cut next week, down from 54 % just before the ADP data. The single currency depreciated from 1.4771 to 1.4592.
The British pound fell sharply against euro and the U.S. currency after the release of U.K. Halifax house prices which fell by 1.1% in November, posting their longest decline since 1995. The weak data added speculation that the Bank of England will lower interest rates by 25 basis points to 5.50% from 5.75% on Thursday. Cable tumbled from 2.0615 to 2.0248 and euro rallied against the sterling from 0.7166 to 0.7240.
The Australian dollar weakened to 0.8660 versus the U.S. currency on Thursday as the Reserve Bank of Australia kept interest rates at 6.75% as widely expected, however, RBA indicated that global growth could ease in 2008. The New Zealand dollar rebounded from 0.7575 to 0.7715 on Thursday as the Reserve Bank of New Zealand kept interest rate unchanged at 8.25%.
Thursday will see the release of Japan’s leading indicators, U.K. industrial and manufacturing production, German factory orders and U.S. jobless claims. ECB will announce its rate decision and is widely expected to keep interest on hold at 4.0%.