The US dollar weakened against a basket of currencies despite positive data from the US. Data from ADP reported employers shed 20,000 private-sector jobs in February, far fewer than the 60,000 jobs lost in January. The labor market remains one of the weakest spots of the economy but the recent moderating pace of job losses gave some encouragement to analysts and market players. Data from the Institute for Supply Management said its services index rose to 53.0 in February, the highest reading since December 2007. A reading above 50 indicates expansion in the services sector which accounts for the majority of US employment.
The US Justice Department also launched an investigation into whether hedge funds might have acted together to bet against the euro. The euro has come under heavy selling pressure during the Greek debt crisis, losing over 10% since November. Critics accused Wall Street firms of exacerbating the crisis by helping governments mask their debts through derivatives deals only to benefit from them later by driving down the values of securities related to them.
The euro edged higher after the Greek government endorsed a EUR 4.8 billion austerity package, boosting hopes the heavily indebted country would get help from the European Union. Euro/dollar trade remains volatile as market remains wary over whether the plan would be enough to win financial support from Germany and France.
The British pound strengthened after a survey showed an unexpected jump in UK services sector activity. Data from the purchasing managers' survey showed Britain's services sector rose to 58.4. Though the positive economic news pushed the pound higher, gains were limited as investors' wariness over Greece's debt problems made them shy away from risk.
The Japanese yen remains little changed against the dollar. The dollar briefly gained vs. the yen after the US private-sector data was released.
The Canadian dollar continued to rally as steps taken by Greece to tackle its massive debt boosted investors' appetite for risk. The loonie was also supported by stronger oil and gold prices.
The Australian dollar clung near multi-year highs against a basket of currencies after a strong economic growth report backed the case for more interest rate rises this year. Data showed Australia's economy grew 0.9% in the fourth quarter, led by business investment and government and private spending. The New Zealand dollar has traded fairly quietly vs. the greenback, mainly supported by the rise in oil and gold prices.
10-Year Treasury Note Yield: 3.651%
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