The greenback edged higher against the majors in Wednesday trading, pushing the euro back toward the 1.39-figure and the pound to 1.5911. The US equity indexes dipped into negative territory in early afternoon while commodities also relinquished overnight gains.
The January ADP employment change improved by more than expected, posting a loss of 22k jobs and beating estimates for an improvement to -30k from -84k in December - its strongest reading in two-years. The Challenger job-cuts revealed its highest level of anticipated layoffs since August at 71,482. Also released was the January non-manufacturing ISM report, which fell short of forecast but remained above the key 50-level. The ISM printed at 50.5 versus a 50.1 reading from December. A closer look at the breakdown for non-manufacturing ISM reveals an improvement in the employment index to 44.6 and an increase in new orders to 54.7.
Foreign exchange traders have much to digest in the Thursday session, including central bank monetary policy decisions and several US economic reports. The Bank of England and European Central Bank are both scheduled to announce the results of their policy deliberations at 7:00 AM and 7:45 AM, respectively. Both central banks are expected to leave interest rates unchanged tomorrow with the key focus shifting to the subsequent policy statements. It will be interesting to see if the BoE opts to leave its current bond purchase plan unchanged at 200 billion pounds.
EURUSD holds just above the 1.39-figure, with support seen at 1.3870, followed by 1.3840 and 1.38. A break below the 1.38-level paves the way for additional losses to 1.3760, followed by 1.3730 and 1.37. On the upside, resistance starts 1.3950, backed by 1.40 and 1.4025. Subsequent ceilings are eyed at 1.4060, followed by 1.41 and 1.4130.