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The U.S. dollar traded higher against the most major currencies after the strong ISM non-manufacturing index for the U.S. he Institute of Supply Management released its non-manufacturing index today. The index increased to 56.3 in May from 55.2 in April, exceeding expectations for a rise to 55.6.
According to the U.S. ADP employment report, private sector employment increased by 179,000 jobs for May, missing expectations for a gain by 217,000 jobs. April's figure was revised down to an increase of 215,000 from a rise of 220,000.
The U.S. trade deficit increased 6.9% to $47.2 billion in April, from a deficit of 44.18 in March. That was the largest figure since April 2012. March’s figure was revised down to a deficit of $44.18 billion from -40.40 billion U.S. dollar.
The Federal Reserve will release its Beige Book later in the day.
The euro traded mixed against the U.S. dollar. Eurozone’s services purchase managers’ index (PMI) declined to 53.2 in May from 53.5 in April. Analysts had expected that the index remains unchanged.
Eurozone’s gross domestic product remained unchanged at 0.2% in the first quarter, meeting analysts’ expectation.
Eurozone’s producer price index fell 0.1% in April, after a 0.2% decline in March. This figure was expected by analysts.
German final services PMI declined to 56.0 in May from 56.4 in April. Analysts had expected that the index remains unchanged.
French final services PMI sank to 49.1 in May from 49.2 in April. Analysts had expected that the index remains unchanged.
Market participants expect the European Central Bank will add further stimulus measures on Thursday. Investors are awaiting the ECB will cut interest rates and announce measures to boost lending to smaller businesses.
The British pound increased against the U.S. dollar due to the better-than-expected services PMI. The U.K. services purchasing managers' index declined to 58.6 in May, from 58.7 in April, but exceeding analysts’ expectations for a decline to 58.3.
The Canadian dollar declined against the U.S. dollar due to the weak Canadian trade balance data and the Bank of Canada’s interest rate decision. The Canadian trade deficit was $0.64 billion in April, after a surplus of C$0.77 billion in March. March’s figure was revised down from a surplus of C$0.80 billion. Analysts had expected the trade surplus to fall to C$0.10 billion.
The Bank of Canada (BoC) kept its interest rate unchanged at 1.00%. Monetary policy makers said that there are the risks posed by slow inflation remain. The BoC pointed out that the current monetary policy is appropriate and the timing and direction of the next change to the interest rate will be determined by future economic data.
The New Zealand dollar hits 3-month lows against the U.S dollar following a decline in dairy prices. Dairy product prices dropped 4.2% to the lowest level since February 2013. Whole milk powder prices slid 8.5%, extending their drop since a February 5, 2014 auction to 28%.
No economic data was published in New Zealand.
The Australian dollar climbed against the U.S. dollar due to strong economic growth in Australia, but lost a part of its gains. The Australian gross domestic product rose 1.1% in the first quarter, exceeding expectations of a 0.9% gain, after a 0.8% increase the previous quarter.
On a yearly basis, the gross domestic product in Australia increased 3.5% in the first quarter, after a 2.8% rise the previous quarter.
The AIG services index for Australia climbed to 49.9 in May from 48.6 in April.
The Japanese yen traded mixed against the U.S. dollar in the absence of any major economic reports in Japan.
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