Dollar Stays Weak, Sheds Ground Against Major Counterparts

(RTTNews) - The U.S. dollar stayed weak against most of its major counterparts on Wednesday amid tensions between the U.S. and China, and potential tariffs on imports from some major trading partners of the U.S.

The Trump administration's decision to delay levies on Canada and Mexico weakened the dollar a bit.

After the U.S. imposed 10% tariff on several items from China, the later slapped tariffs on U.S. goods, like as liquefied natural gas and oil.

China's Finance Ministry said it will impose a 15% duty on imports of coal and liquefied natural gas from the U.S. Also, there will be 10% additional duty on imports of crude oil, agricultural equipment and automobiles from the U.S. from February 10.

Positive sentiment was generated in reaction to a report showing job openings in the U.S. fell by much more than expected in December, leading to some optimism about the outlook for interest rates.

In economic news, payroll processor ADP released a report on Wednesday showing private sector employment in the U.S. increased by more than expected in the month of January, climbing by 183,000 jobs in January after rising by an upwardly revised 176,000 jobs in December.

Economists had expected private sector employment to rise by 150,000 jobs compared to the addition of 122,000 jobs originally reported for the previous month.

A report released by the Commerce Department on Wednesday showed the U.S. trade deficit spiked to $98.4 billion in December from a revised $78.9 billion in November. Economists had expected the trade deficit to jump to $96.6 billion from the $78.2 billion originally reported for the previous month.

Service sector growth in the U.S. unexpectedly slowed modestly in the month of January, according to a report released by the Institute for Supply Management. The ISM said its services PMI dipped to 52.8 in January from a revised 54.0 in December. While a reading above 50 still indicates growth, economists had expected the index to inch up to 54.3.

The dollar index dropped to 107.30 in the European session, and recovered some ground as the day progressed. The index was last seen hovering around 107.65, down by about 0.3% from Tuesday's close.

Against the Euro, the dollar weakened to 1.0400 from 1.0381. Against Pound Sterling, the dollar eased to 1.2503.

The dollar weakened against the Japanese currency, fetching 152.61 yen a dollar, compared with 154.34 yen a dollar on Tuesday. Against the Aussie, the dollar shed about 0.5% at 0.6284 a unit of the Australian currency.

The Swiss franc firmed to 0.9017 a unit of dollar, while the Loonie gained marginally to C$ 1.4315 a dollar.