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The U.S. dollar traded mixed to higher against due to the solid U.S. economic data and as the European Central Bank cut its interest rate. According to the ADP employment report, the U.S. economy added 204,000 jobs in August, missing expectations for a rise of 216,000, after 218,000 jobs in July.
The ISM services index climbed to 59.6 in August from 58.7 in July, beating forecasts for a drop to 57.5.
The number of initial jobless claims in the U.S. last week climbed by 4,000 to 302,000 from 298,000 in the previous week. Analysts had expected initial jobless claims to remain at 298,000.
The U.S. trade deficit declined to $40.5 billion in July from $40.8 billion in June. That was the smallest gap since January 2014. June's trade deficit was revised from $41.5 billion. Analysts had expected the deficit to widen to $42.5 billion.
Final nonfarm productivity in the U.S. rose 2.3% in the second quarter, missing expectations for a 2.5% gain, after a 2.5% increase in the first quarter.
The euro plunged to 14-month low against the U.S. dollar as the European Central Bank (ECB) lowered its interest rate to 0.05% from 0.15%. The central bank also cut its deposit facility rate to -0.20% from -0.10% and its marginal lending rate to 0.30% from 0.40%.
The ECB President Mario Draghi said the central bank will start buying asset-backed securities, including covered bonds. Details of the asset-backed securities (ABS) program will be announced later.
German factory orders rose 4.6% in July, exceeding expectations for a 1.6% increase, after a 2.7% decline in June. June's figure was revised up from a 3.2% fall.
The British pound declined against the U.S. dollar after the Bank of England's interest rate decision. The Bank of England (BoE) kept its interest rates unchanged at 0.5% and its asset purchase program unchanged at £375 billion.
The Canadian dollar rose against the U.S. dollar after the better-than-expected Canadian trade data. Canadian trade surplus increased to C$2.58 billion in July from C$1.83 billion in June, beating expectations for a decline to C$0.9 billion. June's figure was revised down from a surplus of C$1.86 billion.
The New Zealand dollar traded mixed against the U.S dollar in the absence of any major economic reports from New Zealand.
The Australian dollar traded higher against the U.S. dollar. Retail sales in Australia increased 0.4% in July, in line with expectations, after a 0.6% gain in June.
On a yearly basis, retail sales in Australia rose 5.9% in July, after a 5.5% gain in June.
Australia's trade deficit fell to A$1.36 billion in July from a deficit of A$1.56 billion in June, beating expectations for a deficit of A$1.77 billion. June's figure was revised down from a deficit of A$1.68 billion.
The Japanese yen traded lower against the U.S. dollar. The Bank of Japan (BoJ) kept its monetary policy unchanged. The BoJ said it will expand the monetary base at an annual pace of about ¥60 to ¥70 trillion. Japan's central bank added that it will continue with its quantitative and qualitative easing to achieve the 2% inflation target.
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