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Dollar eases after weak US economic data
[NEW YORK] The dollar weakened slightly on Wednesday after a batch of disappointing US economic data raised concerns about the strength of the recovery, suggesting a delay in higher interest rates.
The greenback, which has been on a lengthy tear, took a hit along with US equities following the downbeat data on manufacturing, construction spending, and private-sector job growth.
The latter, a report from payrolls firm ADP showing a slump in business hiring in March, the first drop below 200,000 jobs since January 2014, cast a shadow over markets ahead of Friday's highly anticipated government labour report for March.
Although the monthly ADP report is not considered a reliable indicator of the Labour Department's report on nonfarm payrolls, it was enough to suggest "a slight higher risk of disappointment" in the March jobs data, said Joe Manimbo at Western Union Business Solutions.
Analysts expect the official report to show a slowdown in jobs growth, with the economy adding 250,000 nonfarm payrolls after 288,000 in February, and the jobless rate remaining unchanged at 5.5 per cent.
Moody's Analytics said the ADP report and employment details in the ISM manufacturing survey led it to cut its forecast for March nonfarm payrolls by 40,000 to 220,000.
"Underwhelming job growth Friday would dampen US rate hike expectations and weigh on the dollar," Mr Manimbo said.
The Federal Reserve is closely monitoring the jobs market as it gauges when to raise ultra-low interest rates this year.