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Dollar slides as private employers add lower than forecast jobs in Jan.

February 5, 2014

The U.S. dollar widened losses against a basket of major currencies after a dismal ADP employment data as it raised recovery concerns. Private-sector employers added 175,000 jobs last month from a prior of 238,000 in December, lower than forecast of 185,000 jobs gain. The data is watched carefully as it mainly gives an indication about the jobs report due on Friday. Another report due on Wednesday may signal that U.S. services sector expanded at a faster pace last month. Worries of slowdown in growth spread this week after U.S. ISM manufacturing signaled a cool down in growth to 51.3 in January from 57.0 in December, coming below analysts' forecast of 56.0. Meanwhile, there are fears the deterioration in data would prompt policymakers to decelerate the pace of stimulus cut. Still, the focus is on fundamentals from the world's biggest economy after the Fed decided to slash $20 billion starting from January from its monthly bond purchases to $65 billion . Eyes will focus on the awaited non-farm payrolls due on Friday as it will provide evidence about the health of the labor market. The dollar index, which tracks the dollar's movements versus a basket of major currencies, retreated to hit a low of 81.02 while it is currently hovering around 80.09. Against the yen, the dollar slipped to take the pair down to a bottom of 100.94 after opening today at 101.65. The EURUSD rose after a report showing a widening expansion in manufacturing and services in January. The pair is currently trading around 1.3533 after setting a high of 1.3547. The pound resumed its fall versus the green currency after taking a breather yesterday to touch a low of 1.6251 after a report showing an ease in services expansion to 58.3 from a prior 58.8. Tomorrow, investors will focus on the monetary decision by the Bank of England .

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Source: Financial Markets

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