The Bloomberg Dollar Index dropped to its lowest point of the day after weaker-than-expected U.S. private sector employment growth and service sector activity data led to a decline in U.S. Treasury yields. The index fell by 0.5% to 1208.22, and a further decline below 1197.88 would mark its lowest level since 2022.
ADP reported that the U.S. private sector added 37,000 jobs in May, significantly below the expected 114,000. Nela Richardson, ADP's Chief Economist, noted that hiring momentum is slowing after a strong start to the year. The ISM services index was reported at 49.9, below the forecast of 52.0.
The Canadian dollar reached a new high for the year at 1.3653 against the U.S. dollar after the Bank of Canada kept its policy rate unchanged at 2.75%, aligning with market expectations. The bank stated it would continue to assess the timing and intensity of economic pressures on inflation.
The euro rose 0.6% to a daily high of 1.1435 ahead of the European Central Bank's rate decision. Meanwhile, the pound increased by 0.3% to 1.3559 as the UK aims to finalize a trade deal with the U.S. soon to avoid new steel tariffs.
