In the currency market, the dollar was lower against the euro. Late Wednesday, the euro was trading at $1.4156 vs. $1.4032 on Tuesday.
The buck fell after ADP Employment Services said companies in the U.S. shed 473,000 jobs in June. The ADP report, is often considered a strong precursor of the official Labor Department jobs report, due today. And consensus for Labor’s report is for a much smaller job loss number.

The ADP data “supports the view that payrolls will post a larger decline in June than they did in May,” said economists at RDQ Economics.

“The U.S. dollar reacted negatively to the ADP report, contributing to the sell-off in the greenback that began in overnight action as risk tolerance remained high on buoyant equity and commodity prices,” said Michael Woolfolk, senior currency strategist at The Bank of New York Mellon.

Also today, reported Marketwatch.com, “European Central Bank president Jean-Claude Trichet will begin speaking about officials’ monetary policy and economic outlook. Analysts will also look for any comments on the ECB’s new covered-bond purchase program, the central bank’s answer to quantitative easing programs out of other central banks.”

“If Trichet suggests that he has done enough, which we expect him to do, the euro-dollar could extend its gains,” said Kathy Lien, director of currency research at Global Forex Trading. “If he openly talks about extending the size and scope of program, it would be bearish for the euro.”

Looking ahead, risk appetite is likely to remain the key driver in the currency markets in the near term, though light, summer trading volumes could make for choppy price action well into next month, wrote currency strategists at Standard Chartered Bank.

Source: Dollar Weakens