The US dollar rose to three-week highs against a basket of currencies on Wednesday after data showed that jobs gains in August were roughly in line with expectations, before paring gains on weak manufacturing data. Hawkish comments by Fed Chair Janet Yellen and Vice Chair Stanley Fischer last week increased expectations the US central bank is moving closer to an interest rate hike. The greenback rose to session highs after the ADP National Employment Report on Wednesday showed US private employers adding 177,000 jobs in August, slightly above the 175,000 forecast by a Reuters survey of economists.
Private payroll gains in July were revised up to 194,000 from 179,000. "The upward revision was encouraging, for the actual month of August it was pretty close to expectations," said Richard Franulovich, a senior currency strategist at Westpac Banking Corporation in New York. The dollar index, which measures the currency against a basket of six majors, rose as high as to 96.255, its highest level since August 9, before falling back to 96.066.
The greenback gained against the yen to 103.31, after earlier hitting 103.53, the highest level since July 29. The dollar also hit three-week highs against the euro, after data on Wednesday showed that euro zone inflation was stable in August, against expectations of a slight rise, piling more pressure on the European Central Bank to act. The euro weakened to $1.1121, the lowest since August 10, before recovering back to $1.1143.
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